Luxury London home values have fallen by more than 49 per cent in real terms since the market peaked in 2014, according to Bloomberg analysis of Savills data.
The Savills Prime London index is around 27pc below its 2014 peak in nominal terms, following more than a decade of falling values across the capital’s most expensive housing market.
Bloomberg’s analysis, which combines the Savills index with consumer price inflation, puts the real-terms decline at more than 49pc.
If nominal values remain flat and inflation continues at its current rate, Bloomberg calculates that the real-terms fall will reach 50pc during the first few months of next year.
Savills does not expect nominal price growth to return until 2028.
The downturn began after changes to stamp duty in 2014 increased transaction costs for more expensive homes. Further tax changes affecting landlords, second homeowners, overseas purchasers and properties bought through companies have followed.
Brexit, the pandemic and wider political and economic uncertainty have also weighed on the prime London market.
Lucian Cook, Head of Residential Research at Savills, tells Bloomberg: “There probably isn’t the stimulus for a recovery.”
He adds that the ‘long awaited recovery’ is being held back by both current circumstances and stamp duty.
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