A stamp duty increase for investors and second home buyers has contributed to a slowdown in the central London residential market, according to JLL.
The number of new housing starts in the second half of 2015 was lower than the first six months of the year. JLL said the shift was “clearly” a reaction by developers to “recent political uncertainty, higher tax regime and slower sales market”.
Neil Chegwidden, director in residential research at JLL, said: “Whilst the number of units under construction in Central London continued to climb during 2015 - with a 28% increase in the last year and 10% growth in H2 2015 - there are signs this is activity is beginning to plateau.”
Planning applications for housing units fell by 27% during the second half of 2015.
JLL pointed to George Osborne’s announcement in the last Autumn Statement that investors and second home buyers will be charged an additional 3% stamp duty charge from April 2016 as a cause of the slowdown.
Price movements across London have been mixed over the last year. Values increased by 0.2% during the first quarter of 2016 across central London as a whole. However, values fell by 0.3% in core markets and rose by 0.7% in outer core markets.
Chegwidden said: “Market conditions are highly location dependent - outer core markets where pricing is lower and buyers are largely domestic owner-occupiers will continue to perform well; markets more reliant on investor demand are proving more sensitive with developers and buyers jockeying for position.”