The latest Levy Real Estate/MSCI London Markets Analysis shows the clear impact that the EU Referendum vote had on the capital’s submarkets.

Levy’s Head of Investment, Jonathan Martyr, comments: “Across the London markets the impact of Brexit is clear. We reported a total return from investments in London at 18.1% in 2015. In 2016 the total return was 4.7%. The trends are clear and our research shows the short but steep period where both returns and rental values fell. However, as we head into 2017 rental recovery is being seen and this mirrors market sentiment which is positive but wary of the impact of business rates”.

The analysis reports that demand in core London markets remains strong and, on occasion, record price levels were achieved in Q4 2016. The strongest capital growth was achieved in Camden and Islington at over 5% and the largest fall being in Hammersmith at close to -4%.

Jonathan Martyr observes: “Levy’s core markets of St James’s, Mayfair and Soho continue to perform with St James’s showing a 2.6% capital growth whilst Mayfair was static. Soho continued to perform well with capital growth well over 3%.

“The UK’s economic indicators remain positive, the market largely absorbed the SDLT increase of a year ago, however the impact of business rates is being felt in the occupational markets, and is clearly dampening rental growth. The UK remains globally attractive as a property investment market, comparing well to some European cities where similarly sharp yields exist in markets with higher vacancy rates.

“The opening of the Elizabeth line will be exciting for London, it is suggested that 25m sq ft of refurbishment and development has resulted and an additional 60m visitors will be welcomed.”