Wimbledon, Southfields and Coombe

Wimbledon, Southfields and Coombe
 
The Wider Context

16 May 2016, by Frances Clacy

Prime London property prices are set to plateau before a gradual return to growth

 

The outlook for Wimbledon, Southfields and Coombe needs to be considered in the context of the wider prime London market.

The sales market

Since the Autumn Statement of 2014 and the introduction of new stamp duty charges, the prime London housing market has seen a slowdown in price growth and some high value markets have seen small falls, coupled with constraints due to increases in mortgage regulation.

Further stamp duty changes were announced in 2015 for the purchase of “additional homes”, including second homes and buy-to-let investment properties, which led to further small falls in markets with a high proportion of these buyers. The majority of buyers in Wimbledon, Southfields and Coombe, are purchasing their main residence so this tax will have less of an impact.

Looking forward, we expect stamp duty and mortgage regulation to constrain the prime London market over the next two years with a gradual return to positive rates of price growth over the medium term as the fundamentals of wealth generation remain sound.

Wimbledon and Coombe are well established prime locations and will continue to be desirable to a wide range of buyers, whether local or international, and in particular, families seeking more space and good schools.

By contrast, the emerging market of Southfields is attracting buyers who have been priced out of higher value, more traditional prime markets. We expect this to continue as the area becomes more established.

The rental market

In London, demand in the prime rental market is primarily driven by the economy and employment opportunities. Looking forward, we are expecting rents to increase by 13.1% in the five years to 2020 across prime London as the economy is forecast to continue strengthening and more people will move to the capital.

Across London, a potential threat is the high level of new build stock coming to the rental market simultaneously. However, in Wimbledon, Southfields and Coombe development activity is not on as large a scale as in other areas of prime London, so we do not expect rents to come under pressure from high supply levels.

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