Residential Property prices decline in London’s expensive neighbourhoods downward trend caused by Brexit uncertainty.
According to new data released by Lon Res, London’s business-to-business property data network, prime property prices in the fourth quarter of 2018 fell 5.7%. The 5.7% drop is compared with the same period in the previous year. This is due to the economic uncertainty caused by Brexit.
Over 50% of prime properties on the market were reduced from the initial asking price before being sold. Homeowners have felt there was no choice but to lower the asking price to get any interest before any positive interest in their property.
Recent data from Res also showed the London prime property market was still subdued. Activity in some of the capital’s most expensive postcode’s, Lon Res also found that £2.9bn of housing stock was sold in prime central London last year, sliding from £3.5bn in the year before.
An agent for a prestigious estate agency in Central London who did not want to be named, said “the property market in central London is less than dead, the market has gone down, is still going down. The problem is, not everyone is convinced we have reached the bottom”.
Landlords can achieve higher rents
“The prime rental market continues to benefit, as would-be buyers become tenants. Despite fewer new lets being agreed, owing to an increase in tenancy renewals, housing stock levels are low and competition among prospective tenants is leading to increases in achieving rents in most central London areas. Fewer landlords need to reduce their asking prices and discounts have fallen back. “said Marcus Dixon, head of research at Lon Res
Brexit blamed for the uncertainty
According to a survey carried out as part of the Lon Res research, some 69 per cent of respondents reported that Brexit remained the biggest drag to demand in the year ahead.
The news comes despite recent data showing that wealthy buyers have been on a spending spree for multi-million-pound trophy houses during the last year, with demand for London’s ‘super prime’ residences bucking a wider slowdown in the capital’s property market.
Generally across the UK last year residential property saw a 10% drop and new data suggests would-be buyers are staying on the sidelines because of the unpredictable nature of the UK’s Brexit negotiations.
Looking ahead, forecasters think that property might see a surge once the Brexit uncertainty lifts.