(Bloomberg) -- If you want to sell your home in Belgravia, the London district favored by Russian oligarchs for its large mansions, chances are you’ll have to accept a lower price than you expected.
More than half of sellers in the neighborhood cut asking prices in the three months through October, up from 32 percent in the same period last year, according to data compiled by Hamptons International. In Chelsea, 43 percent of sellers cut the offer price compared with 27 percent in 2015, the data shows.
“Sellers are starting to accept that if they want to achieve sales, they simply have to accept lower bids,” said Johnny Morris, head of research at the broker. “The prime central market had been weakening for quite some time on stamp duty and Brexit has just served to compound that weakness.”
Luxury homeowners were already struggling to sell their properties after the stamp-duty sales tax rose to as much as 15 percent in April for the costliest homes. Sellers came under further pressure to lower prices as potential buyers held off in the run-up to the referendum and stayed away after the shock vote to leave the European Union roiled the property market.
The value of homes in Chelsea and Hyde Park fell 9.8 percent and 7.5 percent respectively in the year through September, according to data compiled by broker Knight Frank LLP. Homes in Knightsbridge declined 5.9 percent.
The number of British sellers cutting asking prices has also increased this year. “The proportion of homes that are sold after a cut in the asking price increased from a quarter to a third across the U.K. since January,” said Fionnuala Earley, residential research director at Hamptons. “It is in London where the effect is strongest.”
There was a 3 percentage-point increase in the stamp-duty sales tax for landlords and second home owners in April, which followed an increase in charges for all luxury-home purchasers in 2014. For owner occupiers, that hike means that a 12 percent tax rate is paid on portions above 1.5 million pounds.
“We’ve seen an uptick in sales since September, after the seasonal summer slump and the Brexit shock, precisely because sellers have got real about prices and lowered them,” said Roarie Scarisbrick, a partner at Property Vision Ltd, a broker that advises prime-home buyers.