World Economy

London Luxury-Home Prices Fall

London Luxury-Home Prices FallLondon Luxury-Home Prices Fall

Sellers of luxury London homes are cutting asking prices on the largest proportion of properties in at least three years as high values, commodity-price declines and new taxes damp demand.

Vendors have cut the asking prices on 39% of homes in central London’s best districts since they were first offered for sale, according to data compiled by researcher Lonres in January. That’s up from 33% a year earlier, the data shows, Bloomberg reported.

The reductions come ahead of an increase in the stamp-duty sales tax in April to as much as 15% for the costliest homes for landlords and second-home buyers. The number of properties sold in the boroughs of Westminster, Kensington and Chelsea fell more than 25% from January through October 2015 compared with a year earlier, broker Knight Frank LLP said this month.

“We have lost a whole chunk of the typical investment buyers,” said Roarie Scarisbrick, a partner at Property Vision Ltd., a broker that advises prime-home buyers. “They are put off by stamp duty.”

Values in London’s best districts rose 5% in the 12 months through January to a median of more than £932,000 ($1.3 million), according to an analysis of preliminary Land Registry data by Bloomberg. The most expensive home sold in January was a townhouse in Mayfair that fetched £15.7 million. The eight-bedroom property has a roof terrace, cinema room, gym and plunge pool, according to an Internet listing for the property.

Prices across London postcodes rose 12.7% in the 12 months through January and the median value is now almost £505,000, the Land Registry data shows. The average purchaser borrowed £339,000 when buying a home in the UK capital in the fourth quarter, according to government statistics.