While it has been expected for months that London property would face trouble following the Brexit referendum of 2016, the extent of this has been revealed. According to figures released by Your Move, one of the UK’s largest estate agency chains, house prices in parts of London have fallen by as much as 15% over the past year. Once the epicentre of the UK property boom, this fresh evidence of the impact of the EU referendum signals troubling times ahead for the capital.
Home prices falling
According to the report published by Your Move, the average price for a home in Wandsworth – a borough including Clapham, Balham and Putney – fell by more than £110,000 in value over the last 12 months. Homes sold for an average of £805,000 in January 2017, now falling to £685,000.
Other London boroughs are also showing steep price falls. In Southwark, south London, the average price has dropped from £666,000 to £585,000 in 12 months, while prices have fallen in Islington, north London, from £750,000 to £684,000.
Overall, house prices in the capital fell to an average of £593,396 in January. This marks a yearly fall of 2.6% from 2017 – the biggest 12-month drop since the recession in August 2009. They have now dropped for the last three months in a row.
Speaking in their report, Your Move states: “This is the steepest annual rate of decline in London prices since August 2009, during the last housing slump, which was itself associated with the banking credit crisis of 2008-2009.”
Brexit to blame
This fall comes as Brexit uncertainty is causing panic among the city’s investors. As more companies move their headquarters out of the UK and the capital in particular, London is bearing the brunt of troubles caused by this doubt. This is resulting in the continuous decline, which is unlikely to end anytime soon.
Speaking to ShortList, James Gubbins, Partner at estate agency Dauntons, comments on how Brexit is the major issue at hand for these declines.
He states: “All markets tend to suffer when there is any doubt about and there is certainly doubt where Brexit is concerned. Buyers (and sellers to an extent) are standing by until they can see some discernible policy emerge in relation to Brexit and this has had the effect of reducing the activity within our markets.”
London falling behind
As a result, London is falling behind the national trend of growth. Taking over the capital as the fastest-growing property market in the UK, the north-west of England is emerging as strong. In comparison to the declines in London, Blackburn is showing the strongest growth, which recorded prices rising by 16.4% over the past 12 months. With interest flocking north, it remains to be seen if London can gain investors back in the face of faster-rising – and more affordable – areas in the UK.
Until Brexit negotiations are complete, it is likely that London will remain in this uncertain decline. One thing is for sure – London’s property boom is truly over.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.