London residential prices may pick up from 2016 trough

For the past 18 months, prices of residential properties in Central London have been relatively stable, and they are likely to recover from the last trough in 4Q2016, according to research by JLL. “[Residential property] prices will start to recover once ‘Brexit’ negotiations are successful. Property prices in prime central London, although down by about 15% to 20% from their last peak in 2015, will likely recover over the next five years,” says Regina Lim, head of research for Southeast Asia at JLL Singapore.
While the political backdrop remains fluid at the moment, record high levels of employment underline the resilience of the UK economy
London’s residential property markets have laboured under new additional stamp duties imposed since 2015, and market uncertainty has persisted since the Brexit referendum in 2016. Earlier this month, British politicians were given six more months to reach common ground regarding Brexit terms.
Assuming a reasonable Brexit occurs before the end of this year, JLL projects that prices of Central London residential developments will grow by 1.5% this year compared to 0.5% growth in Greater London and the entire UK. By 2021, the price growth forecast for Central London properties could reach 5%, more than the 4% projected for prime Central London properties and 3% for the UK residential market.
Any expected recovery of the global city’s residential property market will likely be supported by infrastructure projects like the upcoming Crossrail Line, officially called the Elizabeth Line. The £15.4 billion ($27 billion) Crossrail Line is currently Europe’s largest infrastructure project, and is expected to serve more than 200 million passengers annually.
The government predicts that more than 90,000 new homes will spring up along the route over the next three years. “Crossrail will improve the connectivity and ‘rentability’ of projects around its stations. Typically in the UK, rents don’t rise until after infrastructure is completed. Property investors seeking a source of long-term recurring income could buy a property now before prices have significantly risen, to benefit from the expected tenant demand over the next few years,” says Lim.
Other infrastructure projects include the £1 billion Northern Line extension that is expected to open in 2021. The government says it will help regenerate...