Prices are falling in six of London’s most expensive boroughs, according to the Land Registry’s latest house price index report.
Kensington and Chelsea as well as Hammersmith and Fulham saw a 4 per cent drop in house prices with the City of London falling close to 10 per cent. In Westminster where the average home sells for just shy of a million, prices fell 3 per cent.
Of 354 local authorities in the UK, 11 saw prices fall. More than half of those in London.
A closed tax loophole that went into effect last year may be driving the downward pressure.
Foreign investors must now pay tax capital gains tax when any UK residential properties they own gain in value. Non-UK residents are also now required to pay Capital Gains Tax when they sell their properties.
According to the Land Registry, Westminster which saw a 2.7 per cent drop in prices has 13,000 properties registered to foreign held companies – the highest amount in of all the boroughs in the UK. Westminster includes neighbourhoods such as the West End and Soho.
Kensington and Chelsea has the second highest number of limited company held properties – around 6,700. Camden, and Hammersmith and Fulham each have between 1,500 and 2,000 properties with similar deeds.
Buying a property as a limited company still has its perks. Landlords who are registered as a limited company do not have to pay the 3 per cent stamp duty which was added to buy to let properties in January of 2016.
As well as falling prices in London’s premium property hot-spots, sales volumes have also suffered.
The second smallest number of October sales-behind the City where there is very little residential property – occurred in Kensington and Chelsea, where exchanges occurred on 86 properties.
Other trailing boroughs included Westminster, Hammersmith and Fulham and Camden.
Estate agents were busiest in Bromley, where 383 properties were sold, with an average house price of £433,175.