Price cuts for London homes

Price cuts of nearly 20% and a drop in the value of the pound have created ‘Brexit discount’ bargains on some of the most expensive homes in central London — if you have millions of pounds to spare.

The UK property market was one of the first sectors hit by uncertainty after Britons voted to leave the EU on June 23, at one point forcing more than £18bn (€20.8bn) worth of commercial property funds to be frozen.

Some wealthy foreign buyers saw an opportunity, however.

One Canadian buyer snapped up a seven- bedroom, five-bathroom home with a pool two weeks after the vote for £11.5m, a discount of around a third from its £14m list price when combined with a drop in the pound of more than 10%.

The property, in sought-after Holland Park in west London, had been on the market for eight months, said Charles McDowell, a property consultant working for the buyer.

Prices in prime central London had already started to fall in the run-up to the referendum, thanks partly to hikes in stamp duty tax on high-end property in December 2014 and on second home and buy-to-let properties in April, according to research from consultancy Knight Frank.

After the vote, in July, prices in prime central London -- from Holland Park and Knightsbridge in the west to the City of London in the east -- fell by 1.5%, the biggest fall in nearly seven years, it said.

“Since the vote, a number of buyers have requested discounts due to the climate of political and economic uncertainty,” said Tom Bill, Knight Frank’s head of London Residential Research.

London house prices rose nearly 14% in the year to May, however, asking prices fell by a monthly 1.2% nationwide between July 10 and August 6, according to a survey by property website Rightmove.

Summer is generally a quiet period as many househunters are on holiday, but director of Residential Research at international estate agency Savills said she expected there to be less demand heading into the autumn.

Around 80,000 homes were listed on major property websites in London in the second half of 2015, with half under offer, according to data collated by Swiss bank UBS.

“We believe that this is indicative of a slowing market, which pre-dated the referendum,” said UBS analyst Mark Fielding.