Soaring stamp duty has pushed developers out of the centre of the capital as planning applications have slumped, new research showed on Tuesday.
Property agent JLL’s breakdown of applications showed 49% of all homes under construction are in “core” Zone 1 central London markets, but only 30% of the homes in the planning pipeline are at the heart of the capital.
Even more starkly, just 18% of homes in planning applications made in the past year, 2980, are in the centre, compared with applications for 13,980 homes further out.
Experts put the shift down to the change in the stamp duty regime introduced in December 2014.
Duty hikes on second homes and buy-to-let properties, which deadened the top end of the market, also powered the move, as well as last year’s Brexit referendum.
JLL’s residential research partner Neil Chegwidden said: “We believe that this trend is reflective of the present tribulations in the sales market, namely the high price points, the higher stamp duty regime and the difficulty in selling larger and higher-value apartments.”
Its analysis of planning applications over the past year also reveals a huge eastern bias from developers, with 63% of all units planned are to the east, or south-east of the capital as well as Canary Wharf.