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London house prices suffer UK’s steepest annual fall ahead of original Brexit deadline

House prices in London plunged 1.9 per cent in the year to March, the largest annual fall in the country, ahead of the UK’s original Brexit date.

UK-wide house prices jumped 1.4 per cent over the twelve months, but in London the average property price fell almost two per cent to £463,000, according to HM Land Registry figures.

Homes in the capital also fell 0.4 per cent month-on-month in March as the drop continued in the run up to the anticipated Brexit date of 29 March.

Despite the fall, the figures show an improvement on the 2.7 per cent annual drop to February.

Former RICS residential chairman and north London estate agent Jeremy Leaf said: “Once again, we are seeing London acting as a drag on the rest of the UK housing market as despite improvements in affordability, almost record low mortgage rates and unemployment, combined with a shortage of stock.

“With prices down one month, up the next – no real pattern has emerged.”

Chief executive of online estate agent Housesimple, Sam Mitchell, said the data provided a “distorted picture” as they were based on sales completed during peak Brexit chaos.

He said: “January and February, when offers would have been made for March completions, was approaching the eye of the Brexit storm.

“That uncertainty, and the political squabbling in Parliament, fed through to buyer and seller confidence, particularly in London and surrounding areas.”

He added: “The market has now settled down, and with the EU leave date extended to the end of October, we are expecting more buyers and sellers to take advantage of this Brexit limbo, and relatively calm market conditions, to proceed with sales and purchases.”

By Callum Keown

Source: City AM

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London house prices: How Brexit uncertainty has hit house prices in every borough

London is “acting as a drag” on the rest of the UK housing market, with prices across the capital falling in the last year, according to new figures from property giant Rightmove.

While some regions in the UK such as the midlands and the north west started to kick the Brexit uncertainty that has gripped the housing market in recent years, Greater London average asking prices fell 2.5 per cent annually.

A sales slump in central London saw average asking prices fall 3.8 per cent annually to £757,773 in inner-city areas, while the average in outer London, including cheaper boroughs such as Bexley, Barking and Dagenham fell 0.9 per cent to £512,726.

This came despite the annual spring surge in prices, which only drove Greater London up 1.2 per cent on a monthly basis.

The slumps compared to a record-breaking year in other parts of the UK, however, as average asking prices in Wales, the Midlands and the north west of England bucked any Brexit blues to hit all-time highs, Rightmove found.

London boroughs

Worst hit in the capital was Westminster, where average asking prices fell 6.3 per centannually – but still clocked in at an eye-watering £1.4m. The same was true of Britain’s most expensive area to live, Kensington and Chelsea, where average asking prices fell 3.9 per cent year-on-year to £1.6m.

Kensington And Chelsea Street, Egerton Crescent Named Most Expensive For Second Year Running
Kensington and Chelsea saw a 3.9 per cent annual fall (Source: Getty)

The only boroughs to see an annual rise in average asking price were Bexley and Barking and Dagenham, two of London’s cheapest areas. Bexley rose 0.6 per cent to £408,233, while Barking and Dagenham rose 0.9 per cent to £316,839.

Meanwhile in zones one and two, Lambeth fell 4.7 per cent to £632,590Hackney fell 4.9 per cent to £626,000 and Tower Hamlets fell 6.1 per cent to £559,475.

Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (Rics) residential chairman, said: “London is acting as a drag on the rest of the UK housing market and prices don’t include inflation so have risen or fallen further in real terms.

“The spring bounce is taking place but not reaching to the heights we would have expected and certainly not in the capital.”

Borough

Avg. price May 2019

Monthly change

Annual change

Barking and Dagenham £316,839 1.0 per cent 0.9 per cent
Bexley £408,233 1.2 per cent 0.6 per cent
Hammersmith and Fulham £931,171 0.9 per cent -0.2 per cent
Sutton £470,697 2.5 per cent -0.3 per cent
Southwark £634,232 -1.8 per cent -0.5 per cent
Islington £770,123 1.1 per cent -0.8 per cent
Hillingdon £492,585 1.7 per cent -0.9 per cent
Bromley £530,492 0.5 per cent -0.9 per cent
Waltham Forest £481,926 0.8 per cent -1.0 per cent
Enfield £457,398 0.8 per cent -1.2 per cent
Ealing £555,611 0.8 per cent -1.4 per cent
Havering £406,075 -1.2 per cent -1.5 per cent
Brent £577,818 1.5 per cent -1.5 per cent
Camden £980,210 1.2 per cent -1.5 per cent
Newham £407,868 -0.3 per cent -1.8 per cent
Merton £645,116 2.7 per cent -2.0 per cent
Hounslow £540,484 -0.9 per cent -2.0 per cent
Croydon £437,195 1.2 per cent -2.2 per cent
Kingston upon Thames £610,076 0.4 per cent -2.3 per cent
Harrow £549,634 0.4 per cent -2.3 per cent
Redbridge £451,503 -0.4 per cent -3.2 per cent
Richmond upon Thames £832,012 2.7 per cent -3.3 per cent
Wandsworth £793,014 -2.4 per cent -3.5 per cent
Lewisham £464,200 1.3 per cent -3.5 per cent
Barnet £639,192 0.7 per cent -3.5 per cent
Greenwich £441,287 -0.1 per cent -3.5 per cent
Haringey £602,170 -0.1 per cent -3.7 per cent
Kensington and Chelsea £1,590,380 4.8 per cent -3.9 per cent
Lambeth £632,590 0.8 per cent -4.7 per cent
Hackney £626,095 0.1 per cent -4.9 per cent
Tower Hamlets £559,475 -0.5 per cent -6.1 per cent
Westminster £1,400,270 -1.7 per cent -6.3 per cent

The rest of the UK

The rest of the country painted a very different picture, according to Rightmove.

For homes coming to market this month in Wales, the Midlands and the north western England, average asking prices hit all-time highs, as a shortage of demand pushed prices up.

Wales broke through the £200,000 barrier for the first time ever, at £200,386, rising 4.1 per cent year-on-year, while houses in the west Midlands rose three per cent to £232,247.

Travel Images Of Manchester
The north west of England, including Manchester (pictured) saw an annual rise in prices (Source: Getty)

But for those commuting into central London from outside the capital, prices fell. In the south east of England, the annual average asking price fell 1.1 per cent to £407,239.

Rightmove director Miles Shipside said buyers were largely ignoring Brexit, with buyers spurred into action in the record-breaking regions.

“Despite the ongoing political uncertainty, agents are reporting that the lure of the right property at the right price still attracts good interest. In spite of some of the challenges in the market, interest in property remains very high,” he said.

By Alex Daniel

Source: City AM

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London house prices start to stabilise after three-year dip

Signs that London’s house prices could be starting to stabilise emerged this morning, with a new study showing that values picked up slightly in February.

According to Zoopla, househunters that have previously held off on deals are seeking out buying opportunities in the capital following weaker house price growth amid the Brexit uncertainty.

The property portal said that “while market conditions remain weak, there are signs of a pick-up in demand following a 3-year house price re-correction of London homes”.

The rate of London’s annual house price growth picked up modestly in February, climbing 0.4 per cent when compared with the same month in the previous year.

The number of London postcodes registering a fall in house prices also dipped from 69 per cent in October to 55 per cent in February.

Every city in the UK registered a rise in house prices in February for the first time since 2015.

The city which saw the sharpest year-on-year rise in house prices was Leicester, which registered a 6.8 per cent bump in values over the 12 months.

Richard Donnell, research and insight director at Zoopla, said that there was a “greater realism on pricing by sellers”.

Donnell added: “With unemployment at a record low and mortgage rates still averaging two per cent, buyers appear to be largely shrugging off Brexit uncertainty until there is a material change in the overall outlook.”

Yet today’s figures come despite a swathe of recent data showing that activity in the capital’s housing market has largely continued its downward trajectory in recent months.

House price rises in January fell to 1.7 per cent across the UK, according to recent Office for National Statistics (ONS) data, with London recording the lowest annual growth out of any region.

The Royal Institution of Chartered Surveyors (Rics) also warned recently that uncertainty over Britain’s imminent departure of the EU is likely to damage the UK housing market over the coming months.

By Sebastian McCarthy

Source: City AM

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UK inflation up, London house prices fall by most since 2009

Britain’s main inflation rate ticked up last month but stayed close to January’s two-year low, helping consumers maintain their spending power as wage growth also picked up, even though the timing of Brexit remained uncertain.

Wednesday’s official data also showed house prices rose at the weakest annual pace in 5 1/2 years in January, curtailed by the biggest drop in London prices since September 2009, just after the low point of the global financial crisis.

Consumer prices rose at an annual rate of 1.9 percent in February after a 1.8 percent increase in January, the Office for National Statistics said. A Reuters poll of economists had forecast an unchanged rate of inflation.

Economists said they expected inflation to rise above the Bank of England’s 2 percent target soon, especially as many household utility bills are due to increase in April.

“Inflation picked-up for the first time since August 2018, with rising prices across a range of items, including food and alcohol,” said Suren Thiru, an economist at the British Chambers of Commerce.

“Businesses also continue to report that the cost of imported raw materials is rising. As these high input costs filter through supply chains, they could increase the upward pressure on consumer prices in the short-term,” he added.

Still, British government bond futures rose slightly after the data showed core inflation, which strips out volatile food and energy prices, edged down, leaving the overall picture of domestic price pressures in Britain muted ahead of Brexit.

Weaker inflation, combined with rising wages and the lowest unemployment rate in 44 years, has taken the edge off the uncertainty about Brexit for many households, whose spending drives Britain’s economy.

Data due on Thursday are expected to show that retail sales grew an annual 3.3 percent last month, weaker than just before the referendum in 2016 to leave the European Union but above its average for much of the last decade.

Britain’s modest inflation is also helping the Bank of England as it holds off on raising interest rates while it waits for the outcome of Britain’s Brexit impasse.

Several policymakers at the central bank have said they want to see firm evidence domestic inflation pressure is building before they vote to raise rates.

The ONS said house prices in January rose by an annual 1.7 percent across the United Kingdom as a whole, the smallest increase since June 2013, when Britain was still struggling to shake off the effects of the global financial crisis.

Prices in London alone fell by 1.6 percent, marking 11 months where prices have not risen.

The ONS said prices in the capital were down 3.3 percent from their recent peak in June 2017, compared with an almost 18 percent peak-to-trough fall during the financial crisis.

By Andy Bruce, William Schomberg

Source: UK Reuters

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UK house price growth hits six-year low as experts warn of ‘Brexit downward spiral’

London house prices fell 1.6 per cent in the year to January, official data revealed today, as experts warned a mix of Brexit uncertainty and the death of buy to let are hurting the value of homes.

The sharp price drop in the capital’s housing market meant overall UK house prices rose just 1.7 per cent on an annual basis, the Office for National Statistics (ONS) said today, the lowest rate since June 2013.

London’s decline deepened after a 0.7 per cent drop in December 2018, while homes in the east of England lost 0.2 per cent of their value in January, compared to the same month the year before. This contrasted with growth of 4.2 per cent in the Midlands and 2.8 per cent in northern England.

Although London house prices have fallen, it remains by far the most expensive place to purchase a property in the UK, at an average of £472,000. It is followed by the south east and the east of England, at £321,000 and £288,000 respectively.

Real estate partner at Pinsent Masons, Kevin Boa, said: “It’s no wonder that there is little buyer appetite whilst Brexit uncertainty persists, alongside the death of buy to let, increased stamp duty and the prospect of interest rate rises.”

“Yet regardless of what happens with Brexit, there remains a massive gulf between asking prices and buyers’ ability to afford mortgages, especially in the south east”, he added.

“The bottom line is we are still not building enough homes to meet population forecasts, even if Brexit leads to a decline in net migration. Whatever happens with prices over the coming months and years, this chronic lack of housing is the biggest issue for the UK’s property market.”

John Goodall, chief executive of buy-to-let specialist Landbay, said: “At a regional level, price rises in London continue to lag behind the likes of the east midlands and east Anglia, a sign that demand in the capital is cooling as many buyers migrate away in search of something more affordable.”

Kevin Roberts, director of the Legal & General Mortgage Club, said the figures provide more evidence of a “subdued” market.

“As far as the mortgage market is concerned, however, it’s not doom and gloom at all. The current low-interest climate coupled with increased lender innovation means we’re seeing more and more buyers take their first steps, with the number of first-time buyers hitting a 12-year high last year,” he added.

The ONS also revealed today that growth in London private rental prices remains sluggish, rising by 0.2 per cent in the 12 months to February 2019, up from 0.1 per cent in January 2019.

London’s private rental growth was the lowest in the country, followed by the north east at 0.3 per cent. It weighed on the UK’s overall figure, which was 1.1 per cent in the 12 months to February 2019.

Co-founder of London rental agency Ideal Flatmate, Tom Gatzen, said: “Broadly speaking, the annual rate of rental growth across the UK remains at its most palatable for the last three years.”

He added: “However, these consistent uplifts, regardless of how marginal, continue to put pressure on the already strained cost of living for tenants across the nation.”

By Joe Curtis

Source: City AM

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London is ‘dragging’ on average house prices across UK’s top 20 cities

UK city house prices rose by 2.9 per cent over the 12 months to January 2019 but London has become a “drag” on the housing market after slow growth in the capital.

The latest Hometrack Cities Index, which looks at house prices across Britain’s top 20 major cities, showed prices are rising fastest at six per cent in Leicester, followed by 5.8 per cent in Belfast and 5.4 per cent in Manchester.

But house price inflation in London was virtually flat at 0.2 per cent, showing the second slowest growth of the 20 cities outside of Cambridge.

Aberdeen was the only city where prices fell, as they dropped 1.6 per cent. The average house price in the Scottish city is down £34,000 from mid-2015, at the time of the collapse in oil prices.

The data showed how the weakest housing markets have the longest sales periods and largest discounts, which is currently Aberdeen and inner London, where discounts on asking prices reach seven per cent on average, with it taking 16 weeks to sell, on average.

Of the 20 cities, three of the bottom four for growth did have the highest average house price still, with London, Cambridge and Oxford all above £400,000, while no other city averaged more than Bournemouth’s £287,700, among the UK’s average of £216,600 in these cities.

“This price growth continues to be driven by affordable locations at the bottom end of the house price ladder and in these slower market conditions, it’s only natural that the more desirable UK cities will see prices growth flatten and the time to sell extend, due to the already inflated price of getting a foot on the ladder there,” said Marc von Grundherr, director of Benham and Reeves.

“Of course, the commitment of investing in the inner London market at present is likely to take a bit more thought than it may have previously, but to label London as a ‘drag’ and to liken the market strength to that of Aberdeen is a tad misleading,” he added.

“Prices are holding firm, transactions are steady and London remains the pinnacle of the UK housing market, having emerged from the negative price trends of the previous year.”

Source: City AM

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London house prices to fall three per cent after a no deal Brexit

London house prices could dip three per cent after a no deal Brexit, new research has found.

In the event of Britain and the EU failing to reach an agreement, housing prices in London could fall three per cent in the six months following the 29 March deadline, according to a Reuters poll out today.

A drop in housing prices would be coupled with a weak pound following a no-deal Brexit, according to Reuters, making homes in the capital more attractive to foreign investors.

“There will be a palpable shock to the UK economy in terms of GDP, inflation, job creation, etc,” Tony Williams of Building Value told Reuters.

Williams said that this would affect the housing market in the UK, with the poll predicting that a no deal Brexit will result in a one per cent drop nationally in house prices.

“This will spill over dramatically to the residential market, with London bearing the brunt given the international catchment of prospective buyers,” Williams told Reuters.

However, if an agreement is reached, property prices are expected to rise 0.5 per cent in the capital and 1.5 per cent nationally.

The poll, which was conducted between 13-20 February, supports previous reports that a no deal Brexit could impact an already cooling housing market.

Peter Dixon, a global financial economist at Commerzbank, told Reuters, “Prices have clearly come off the boil of late but on the assumption that the UK does not leave the EU without a deal, there is scope for the resumption of a modest upward trend.”

A poll of 25 market watchers found that London homes will drop 2 per cent this year, but expect the market to rebound with a rise of 0.5 per cent and 2.5 per cent in the next two years, respectively.

National house prices were predicted to rise in the next three years, starting at 1.5 per cent this year, 1.8 per cent for the next, and then 2.3 per cent in 2021.

Russell Quirk, an online estate agent told Reuters: “The fundamentals of the UK housing market remain as they are: lack of supply; a growing population; cheap money – a Brexit of any flavour will not dent those fundamentals.”

Source: City AM

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London house prices: Prime postcodes dip as Brexit uncertainty weighs on market

House prices in London’s most expensive neighbourhoods tumbled in the run-up to Christmas, continuing on a downward trend in the wake of uncertainty from both buyers and sellers.

According to new data from Lon Res, prime property prices in the fourth quarter of 2018 fell 5.7 per cent when compared with the same period in the previous year.

More than 50 per cent of prime properties on the market underwent a price reduction before being sold, with homeowners lowering the value of their houses in a bid to lure in buyers.

In a fresh sign of the subdued activity within some of the capital’s most expensive postcodes, 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.

“In an uncertain market the response by both buyers and sellers in prime London has been to hunker down and observe rather than participate. This is impacting on both transaction levels and prices. However for those willing to buy, there are opportunities to be had and purchasers are negotiating accordingly,” said Marcus Dixon, head of research at Lon Res.

Dixon added: “The prime rental market continues to benefit as would-be buyers become tenants. Despite fewer new lets agreed, owing to an increase in renewals, stock levels are low and competition among prospective tenants is leading to increases in achieved rents in most central London areas. Fewer landlords are needing to reduce their asking prices and discounts have fallen back.”

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.

Despite political uncertainty ahead of Britain’s imminent departure from the EU and plans for a new stamp duty on international buyers, activity in London’s ultra high end housing scene has been heating up in the wake of price falls and a drop in the pound that has lured in foreign investment.

Source: City AM

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London house prices dip over 2018

London house prices dipped in 2018, with uncertainty looming large over the capital in spite of double-digit growth across many of the UK’s other major cities.

Property prices in London tumbled 0.2 per cent last year, according to new data which underlines fears of a slowdown in activity across parts of the capital’s housing market over recent months.

However, other major UK cities have shown more resilience despite confidence hitting the capital in the wake of the Brexit vote, with Birmingham and Manchester seeing prices rise by 16 per cent and 15 per cent respectively since June 2016.

“Weaker growth in London, Cambridge and Aberdeen has been a large drag on the headline rate of house price growth across the UK cities index over the last year. House prices in London have been falling for almost 12 months while the rate of growth has slowed across cities in southern England, a result of growing affordability pressures, higher transaction costs and increased uncertainty,” said Richard Donnell, research and insight director at Zoopla.

Donnell added: “The strongest performing cities are outside south eastern England where affordability remains attractive and employment levels are rising. We expect current trends in price growth to continue across the rest of this year, with prices rising in line with earnings for much of the UK but lower growth and some house prices falls in London and the South.”

Evidence of growth in areas outside of London comes on the same day as the Mortgage Advice Bureau said that there had been a “positive end to 2018 as the market is still busy in the run-up to Christmas”, with areas such as Yorkshire and the Humber, as well as the East and West Midlands, exceeding seasonal expectations.

Source: City AM

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London house prices fell 1.5 per cent in December as Brexit bites

The average asking price for London houses fell 1.5 per cent in December compared to the previous month as Brexit uncertainty continued to dampen the capital’s property market, according to figures released today.

Figures from the latest Rightmove House Price Index showed the average asking price for a London home is now just under £594,000. Nationally, asking prices increased by an average of 0.4 per cent in December.

“Given the current market backdrop and ongoing political turmoil, it’s not surprising that the more challenging conditions in London and its nearby regions mean that they appear to have had a slower start to the year,” said Miles Shipside, Rightmove director and housing market analyst.

The average time taken to sell a home in London in December was 82 days, up from 78 days at the same time last year. London houses took almost two weeks longer to sell than the national average of 70 days.

Brian Murphy, head of lending for Mortgage Advice Bureau said: “It’s no surprise that today’s report suggests that the northern regions of the UK appear to have had a brisker start to 2019 than London and the south, as this is a continuation of the disaggregated picture we saw last year.”

Despite the sluggish market, Rightmove reported that visits to its website in the first two weeks of 2019 were up five per cent on last year.

Murphy said that “regardless of the ongoing Brexit-driven headlines, this perhaps highlights that regardless of geopolitics, people both need and want to get on with their lives”.

Source: City AM