Chelsea & Earl's Court

Chelsea & Earl's Court
 
Taking a long-term view

5 December 2016, by Gaby Day

The effects of Brexit on the market may take time to settle as the UK Government negotiates its exit from the EU

 

The outlook for Chelsea and Earl’s Court needs to be measured in the context of the broader prime London market.

Sales market

As we move forward, the prime London markets will continue to be shaped by pre-existing constraints. Prior to the EU referendum prices across prime London had adjusted to a higher tax environment, though the market had become restricted to the most committed buyers and sellers.

However, since the referendum result in June, the fall in the value of the pound has presented an opportunity to overseas buyers who are particularly prevalent in Chelsea and Earl’s Court.

Over the final quarter of 2016 we expect further sentiment-driven price adjustments, though the market will be underpinned by low interest rates and the value of sterling. Looking to 2017 and 2018 we anticipate broadly flat prices as the UK Government negotiates its exit from the EU.

On the basis that London retains its position as a world city and global financial centre we expect the market will rebound from 2019, though to what extent is likely to be tempered by the underlying tax environment.

Whilst this presents investment opportunities for those prepared to take a long-term view, sellers will need to be realistic and flexible in terms of their price and aspirations over this period.

Rental Market

Looking forward, over the short term the impact of Brexit is likely to mean buyers remain cautious. This is expected to push demand into the rental market, given the impact of higher stamp duty and concerns over job security in the financial and business services on people’s willingness to commit to a purchase.

On the supply side, this is likely to be offset by more stock coming to the market in Earl’s Court and Chelsea than we have seen historically due to higher levels of development and increased interest from overseas investors driven by the currency advantage. Landlords will need to remain competitive on asking rents and flexible on terms in order to attract tenants in the long term.

placeholder

Subscribe to Savills research

 

Would you like to be notified via email about new research?