Knight Frank's latest research on prices of prime central London piles is likely to prompt a few wails of anguish in Kensington and Chelsea. The surveyor and upmarket estate agent said price growth had slowed to zero in October due to the uncertainty surrounding May's general election, which Labour's Ed Miliband is fighting with plans for a mansion tax on homes worth more than £2m. Knight Frank said this was the first time in four years that monthly growth was not registered, resulting in annual growth of 6.5 per cent in the year to October. Prices in central London have swelled by 40 per cent over the past four years, it said:
While we expect zero growth in central London prices throughout 2015, if the prospect of a mansion tax recedes after May, we could see modest positive growth in the second half of the year. Between 2015 and 2019, we forecast cumulative growth of 22 per cent during what we believe will be a more subdued period for the prime central London market compared to recent years.
Its Prime Central London Sales Index has been running since 1976 and covers 13 inner London boroughs from Islington in the north east to Chelsea in the south west. Research published by Capital Economics last week suggested that homes worth £2m-£3m would fall up to 3 per cent in value and homes worth more than £10m by nearly 16 per cent as a direct result of the tax.