Stamp duty changes that came into play in December of last year saw the prime property market in London slow down considerably, with homes costing more than £1 million seeing fewer sales in the wake of this band being hit hard by the new band system.
It has meant a slow year for the prime London market, with sales numbers falling and the number of £1 million plus properties on the market dropping as buyers looked to get themselves a deal for below the most expensive stamp duty band.
However, according to a new report, this may soon be a thing of the past, with 2016 expected to see the prime London market returning to strength after a year of slowing down. The report from agents Marsh & Parson said that in the next year the prime market's prices are set to rise by a modest three per cent, driven forward by increases in the sale of homes costing less than £1.5 million.
In 2015, some 59 per cent of all property sales in the prime London market have been selling for below the £937,000 threshold, which allows people to avoid the top tier of 12 per cent stamp duty. However, in 2016, some 95 per cent of sellers in this market should be expecting to see their home sell for the asking price, which should help the prime market in London gather pace once again.
It will also be the case that in the same period we start to see areas further afield bringing about large rises in both sales and prices as people look outside of the centre of the city for places to buy prime homes.
Certain less popular areas will start to take over from their more prestigious neighbourhoods. For example, Tooting will start to see sales from those who can no longer afford to live in nearby Balham and Queen's Park will be popular with those who would previously have bought in north Kensington and Little Venice.
These will be just a few of the areas that start to become popular as prime buyers look further afield for better deals.
"It’s already started but it’s going to take a while to iron out these differences, and in the meantime the brightest spots of house price growth will be in places where average house prices are climbing from a lower base," said Peter Rollings CEO of Marsh & Parsons.
"Gone are the days of travel card zone snobbery and London buyers will increasingly stretch their aspirations southwards and northwards well into zones three and beyond to find the best priced properties. What we have commonly considered prime London is growing geographically, feeding off the popularity of new progressing areas," he added.