KF Insight: Prime south-west London buyers cast the net wider after stamp duty hike
Buyers are looking further afield for the perfect property in south-west London, as Luke Ellwood tells head of London residential research Tom Bill
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Buyers at the top end of the south-west London property market are searching a wider area than ever before as higher rates of stamp duty mean finding the right property becomes as important as the right location.
The average search area increased tenfold to just over 5km between 2013 and 2017, Knight Frank data shows. The analysis covers the £4 million-plus price bracket and measures the average distance between properties viewed and the final property purchased.
A distance of 5km in 2017 compares to 1.6km in 2016 and 751 metres in 2015.
“Buyers are keen to get it right first time because higher rates of stamp duty mean the stakes are higher,” said Luke Ellwood, Knight Frank regional partner for south-west London. “Above a certain price point it’s fair to say the property itself is equally as important or, in some cases, more important than the location.”
Transaction levels in the prime London market cooled following an increase in stamp duty above £1 million in December 2014 and a subsequent 3% rise for buy-to-let properties in April 2016.
However, as part of a wider recovery across the capital, sales volumes in south-west London increased 10.8% in the year to August 2017.
Above: Luke Ellwood discusses the changing dynamics of the prime south-west London property market with Knight Frank's Tom Bill
“This new trend is precisely the reason our offices never operate in isolation,” said Luke, who has worked in estate agency since 1988 in areas including Fulham, Notting Hill and East Anglia. “If someone is looking to buy a property above £5 million, we put a package together to ensure they have the best view of the whole market.”
The number of new buyer registrations in south-west London rose 15.4% and viewing levels were up 18.4% over the year to August. Meanwhile, prices dipped 2.4% in the year to August, which was an improvement on a drop of 2.8% recorded in January, as prices show evidence of bottoming out. “Prices have essentially fallen back to where they were in early 2014,” said Luke.
Luke Ellwood is regional partner for south-west London, based in our Richmond office. The Richmond sales team is on hand to help with any query related to buying or selling property in the area.