London house prices won’t start rising until after Brexit, according to experts
Prime house prices in the capital will not begin to rise until after Brexit, analysis by upmarket estate agent Savills has suggested.
House prices in prime central London will fall 3.2 per cent this year and stay flat next year, before climbing two per cent in 2019, according to Savills’ five-year forecast.
Meanwhile, sellers across the rest of London will have to wait until 2020 before prices begin to edge higher, with prices expected to fall 2.1 per cent this year, two per cent next year and flat growth in 2019, before finally rising five per cent in 2020.
Having fallen 0.5 per cent this year, house prices in the capital’s suburbs will remain flat in both 2018 and 2019, rising 4.5 per cent in 2020, the analysis showed.
However, by 2022, house prices in Central London will have risen 20.3 per cent, while across the rest of London they will have risen 10.2 per cent. The suburbs will experience a slightly higher rise, at 12.5 per cent.
“Uncertainty fuelled by Brexit and a weakened government mandate since the June election, means sentiment is fragile,” said Lucian Cook, head of UK residential research at Savills.
“Where sellers are pricing for today’s market, transactions are proceeding, but the market is highly discretionary and price growth is not anticipated until there is clarity over the UK’s future relationship with Europe.”
“But we think the risks regarding London’s position as a global commercial centre have been overplayed,” added Yolande Barnes, head of world reasearch.
“Whatever the challenge from other cities, London will almost certainly remain a key global financial centre and develop as one of several European hubs for the growing tech sector. Its prime markets will therefore benefit from new domestic wealth generation as well as attracting wealthy international buyers.”
London house price slide
The forecast is the latest sign London house price growth has begun to fall. Figures LSL Property Services last week showed average house prices in Greater London dropped 1.4 per cent in August, dragging down house price growth for the UK as a whole for the fifth month in a row.
The top end of the capital’s market has also suffered, with more analysis last week showing the number of high-end new-builds sold in the capital fell 55 per cent in the second quarter of this year.