London house prices: intensification of Brexit uncertainty sees property market fall pick up pace as experts say ‘it’s tin hat time’
The long slide in London house prices since the EU referendum has picked up pace with the market falling for the ninth quarter in succession, according to latest figures today.
The average cost of a home in the capital dropped 1.7 per cent to £460,686 in the three months to September, wiping just over £5,000 from its value.
This marks an acceleration since the 0.7 per cent drop recorded in the spring quarter. Prices have been falling continuously since a peak in early 2017 as the impact of the chaotic Brexit negotiations began to bite into buyers’ confidence.
Mortgage lender Nationwide said “the intensification of Brexit uncertainty” was dragging down the broader economy although this has been offset in the housing market by record low mortgage rates and low unemployment.
The figures from the building society show prices in the commuter belt, where they fell 1.6 per cent, and the broader South East region, down 0.6 per cent, are also in negative territory as the difficulties in the London market ripple out.
However, Nationwide’s chief economist Robert Gardner pointed out that prices in London are still only around five per cent below the all-time highs of 2017 and 50 per cent above their 2007 levels before the financial crisis.
Jonathan Samuels, chief executive of property lender Octane Capital, said: “It’s a miracle that the market is holding up as well as it is given the level of political turmoil. Low supply and stock levels continue to support prices while cheap mortgages and the strong jobs market are steeling buyers’ resolve.
“The resilience of the property market looks set to be tested like never before in the final quarter of 2019. To say it’s tin hat time is an understatement.”
Meanwhile, agents Savills said the prime central London property market fell 0.3 per cent in the three months to September, the smallest quarterly decline in four years.
In the most exclusive central postcodes, where property prices average £4.4 million, price falls slowed to three per cent.
This left them on average 13.6 per cent below their pre- referendum levels, and 20.4 per cent below the market peak five years ago.
For a US dollar buyer this equates to an effective fall of around 42 per cent once the slump in the value of the pound is also factored in.
More than two-thirds of Savills’ London agents said Brexit is the biggest constraint on the market.