Price falls in London now spreading out beyond the capital, latest analysis suggests
While prices have been falling in London, the latest analysis of the property market shows that prices are also now falling in England and Wales.
The LCPA residential index says that there is little doubt that Brexit uncertainty is derailing home owners now, not just investors and plans are being put on hold, adding that the economic fall-out of a bad Brexit could impact the housing market for years to come.
In England and Wales, excluding Greater London, prices growth it at its lowest since 2013, down by 0.7% in the final quarter of 2018 to an average of £262,126 while sales fell by 3.7%, the largest drop since 2008.
In the new build market there is more buoyancy with sales up 3.6% year on year and prices at an average of £299,617, representing a 14.8% premium over existing stock.
In Greater London prices fell 1.9% in the final quarter of 2018 to an average of £610,708 and sales were down by 4.8%. The data show that new build prices increased by 20.4% to £661,677, but sales in this sector fell by 18.2%, to the lowest level seen since 2015.
In the prime central London market average annual prices fell by 12.7% on a quarterly basis to £1,812,051 but annual transactions were just above historic lows, down by 16.5% over the year.
New build average prices were £2,268,219, a 61.4% premium over existing stock and as with Greater London, sales fell, down by 46.1% to just 73 and prices fell by 29.6%. Naomi Heaton, chief executive officer of LCP, described it as unprecedented period.
‘On a more optimistic note, there has been evidence of a pickup in interest as investors seek to capitalise on extremely soft prices. However, with Brexit rolling on beyond March and neither the Prime Minister nor European Union leaders able to state what is going to happen, investors may now wait to see if sterling weakens further. This limbo continues to have a suffocating effect on prime central London and is now extending to the whole of the UK property market,’ she said.
‘The circus that is Brexit also continues to derail many people’s plans to move or invest. Some positive news may provide the impetus to get the Greater London housing market moving again. Although annual prices for new builds have increased, Brexit has not done anything to improve the flow of new developments,’ she explained.
‘The low level of transactions throughout the UK is already having a damaging effect on estate agents. With sales figures so low, many rely more and more on their lettings departments. With the imminent ban on tenant fees coming into effect on 01 June 2019, agencies are going to suffer reduced revenue at a time when many are already struggling,’ she added.
‘It is also likely that many tenants will hold back any move until this date passes. The combination of low sales volumes and reduced revenue may well bring further agency consolidation and closures throughout the rest of 2019,’ she concluded.