London luxury home prices hit by longest slump in decades

Bloomberg

It was a symbol of the swagger in London’s luxury home market: a mansion in the trendy Notting Hill neighborhood with a car elevator and a swimming pool that transforms into a ballroom at the touch of a button.
But just over a year after Havona House was listed with great fanfare for 25 million pounds ($32.3 million), the owners of the seven-bedroom house have taken it off the market, stymied by the longest price slump in decades.
The sale prices of top-end homes in the British capital have been falling for nearly four years, weighed down by a cocktail of tax hikes, a crackdown on money laundering and a glut of new properties. Uncertainty surrounding Brexit has only made things worse, and the recent decision to delay the divorce until Halloween means sellers’ long wait for the bottom will likely continue. “It’s just not the right time to trade it,’’ said Becky Fatemi, a director at Rokstone, the broker that marketed Havona House.
Home prices in London’s swankiest districts began falling in August 2015, according to an index compiled by Knight Frank. That predates the Brexit referendum by nearly a year and puts the downturn at 45 months, almost four times longer than the sharp plunge during the financial crisis, the broker’s data show.
While the duration of the current slump is grinding sellers down, price declines are less dramatic than in the past. In prime central London prices are down about 12.9% since August 2015, according to Kn-ight Frank’s index. That compares with a 22.3% drop dur- ing financial crisis and a 20.7% decline in the early 1990s.