The development comes as prices for prime central London property are forecast to recover from a recent slowdown. Price growth for the sector peaked at 24 percent year on year in 2010, but is now down to single-digits.
“We’ve seen some deceleration and certainly negative movements over the recent past as a result of a range of factors… but the important point is it’s the most international market in the U.K.,” Adam Challis, head of residential research for EMEA at JLL, told CNBC’s Street Signs on Tuesday.
“As a result it’s affected by a whole range of factors that are beyond domestic economic performance or domestic demand for housing. For many people around the world they look at it sometimes as a safe haven, but also that long-term outperformance (something like 7 or 8 percent per annum over the last three decades) is something that attracts many.”
The slowdown in London’s property market was due to several factors, including Brexit fears, changes to stamp duty (a U.K. property transaction tax) and political uncertainty, according to Elliot Castle, founder of U.K. home buying company, webuyanyhome.com.
“It does not seem to be showing much sign of a full recovery just yet. It would appear the buoyancy and growth previously seen in the London market may take a little longer to fully recover,” he told CNBC via email.
However, London remains an attractive location for developers.
“London continues to be a thriving city with one of the most robust economies in the world and a shortage of housing. Although there is a price adjustment in the market, I don’t envisage a slowdown in the number of new developments,” Castle said.
Prime central London house prices fell 2 percent last year, but will grow 2 percent in 2017, 4 percent in 2018 and 5 percent the year after that, according to forecasts published on Monday by U.K. property services group Countrywide.
“Economic conditions for households will remain challenging over the next year as inflation eats into budgets and interest rates begin to rise,” said Fionnuala Earley, Countrywide’s chief economist, in a press release.
“But we expect the UK economy to recover and wage growth to pick up in response to global growth. That, combined with a continued lack of housing supply, will help to support house prices. “