London's luxury housing market suffers wobble before EU vote

London's luxury housing market took a wobble in the run-up to the EU referendum amid a "lack of urgency" from buyers, according to an index.

Prime property prices in the capital fell by 0.2% in the three months leading up to the referendum, leaving average prime London values down by 0.7% annually, the report from Savills found.

The prime property market includes the most aspirational homes and the top 5% most expensive properties for sale are included in this bracket.

Savills said prime London property prices are now sitting at around 1.4% below their value compared with a peak in 2014.

The property price falls were more pronounced in prime central London - which includes Knightsbridge, Kensington, Chelsea, Westminster, Notting Hill and Earl's Court.

Top-end property prices there have fallen by 1.4% over the last three months, and are now 3.9% lower than a year ago and 8% lower than their 2014 peak.

But despite prices edging down slightly in recent months, prime property prices across London are still more than a third (34.9%) higher than they were in 2007.

Meanwhile, property in the commuter zones around London has seen slightly positive price growth in the last three months "as the market slowed in response to a lack of urgency amongst buyers", the report said.

Savills' findings were collected in the week before the EU referendum.

Lucian Cook, head of UK residential research at Savills, said there have been "conflicting signals" in the market following the referendum, suggesting the impact will only become clearer over the coming months.

He said: "Falls in sterling have prompted some international buyers to re-enter the market, while there has also been a fair share of speculative bids from those hoping to secure a bargain. Against this context, sellers have generally taken a pragmatic approach around pricing without having to slash their expectations."

Concerns have been raised that housebuilding levels will be disrupted by the vote to leave the EU.

The Government said on Thursday that Communities Secretary Greg Clark and Housing Minister Brandon Lewis had met with members of the Home Builders Federation (HBF), whose members build around 80% of new build homes in England and Wales.

It said the HBF and its members stated that all indicators show sales rates have not been affected by last week's referendum.

Mr Clark said: "The need for new homes continues as does the Government's commitment to getting them built."

Peter Andrew, deputy chairman at the HBF, said: "House builders remain confident in the underlying level of demand for housing and will continue to deliver the homes the country needs."