London’s resi land values took a massive hit last year

Prices fell 11.5% in 2016: Knight Frank

Homes in the Notting Hill district of London, England (Credit: Getty Images)
Homes in the Notting Hill district of London, England (Credit: Getty Images)

The value of residential land in London’s prime central districts fell by 11.5 percent last year, the biggest fall in half a decade.

The impact of Brexit and tax increases are driving the fall, Bloomberg reported, citing a report from international real estate brokerage Knight Frank.

Tax hikes caused home values in the priciest districts of the city to drop by an average of 6.7 percent in the 12 months through January, the report said.

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It appears that the conditions of 2010, when “savvy investors returned to the market and bought in expectation that pricing was reaching the bottom,” are returning, according to Ian Marris, the joint head of residential development at the brokerage.

In January, Related Companies CEO Jeff Blau said there’s been a drop in prices for London luxury homes, and singled out Brexit as a key reason. “Uncertainty is bad for business, and Brexit has created uncertainty,” he said.

Last year, investors from China and Hong Kong purchased approximately $3.75 billion in the London real estate.

Earlier this week, Alistair Meadows, head of U.K. Capital Markets at JLL, told the Wall Street Journal Chinese investors are taking a “a wait-and-see approach” when it comes to deals in the United States. [Bloomberg]Miriam Hall