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Merton leads London house prices higher as buyers seek space

House prices in the south-western boroughs of Merton and Sutton rose at the fastest pace in London in the year to July as buyers looked for more space during the coronavirus pandemic, according to exclusive analysis by property website Zoopla for City A.M.

Prices barely budged in the borough of Hillingdon on the western edge of the capital and in Enfield in north London, however, reflecting the uneven effect of Covid-19 on the city’s property market.

Zoopla’s new analysis of its latest house price index showed that prices jumped 3.2 per cent in Merton the year to July and 3.1 per cent in Sutton. That was well above the UK average of 2.5 per cent.

In joint third place were Newham in east London, Haringey in north east, and Wandsworth in south west, where prices climbed 2.7 per cent.

Grainne Gilmore, head of research at Zoopla, told City A.M.: “We have seen rising demand for three-bed homes and larger houses in London. And the availability of this type of stock, across a wider range of price bands, is reflected in these locations.”

Stamp duty holiday boosts London house prices

UK house prices have soared to record highs in the wake of the coronavirus lockdowns, even as the country’s economy suffers its worst year in memory.

Pent-up demand – which accumulated while the property market was frozen in April and May – and the government’s stamp duty holiday have massively boosted the market.

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Zoopla said the stamp duty holiday, which raised the payment threshold to £500,000 until March, had lifted London sales by 27 per cent. Yet its analysis showed that the effect on the capital’s housing market has been uneven.

Hillingdon and Enfield were the least desirable for new buyers over the last year. Prices rose just 0.3 per cent and 0.4 per cent respectively.

Gilmore said: “While we are seeing demand outstrip supply in many areas, putting upward pressure on prices, this is happening to different extents in different localities.”

Harrow saw the third smallest rise with 0.9 per cent growth. Ealing was next with one per cent growth and Bromley had the fifth-smallest increase, of 1.1 per cent.

“We are also seeing the effects of a ‘one-off’ shift after lockdown, with demand from households who have reassessed how and where they want to live,” Gilmore added.

Analysts and estate agents have reported that buyers are looking for gardens and properties near parks, as well as more space.

Kensington and Chelsea the priciest borough

London house prices on average grew by 2.4 per cent in the year to July. It outpaced other areas in the south of England such as the south east, which saw 1.2 per cent growth.

However, regions in the north of England achieved the strongest growth. Yorkshire and the Humber and the north west both saw prices increase 3.2 per cent.

The price discrepancy between London’s different areas remained huge in July, Zoopla’s data showed.

In Kensington and Chelsea, where prices grew two per cent in the year to July, the average house cost £1,170,700.

Westminster was the second-most expensive, with the average property worth £955,000. House prices grew 1.8 per cent over the year in the borough. The City of London, where prices climbed 2.2 per cent, was third with an average price of £786,400.

Barking and Dagenham was the cheapest borough, with the average house costing £293,000. Bexley was second cheapest, at £344,700, while Havering came in third, at £366,800.

What happened to house prices in your London borough?

London boroughCurrent priceQuarterly changeAnnual change to July
Merton £507,4890.8%3.2%
Sutton £394,2400.3%3.1%
Newham £374,6990.7%2.7%
Haringey £512,1140.3%2.7%
Wandsworth £626,2500.7%2.7%
Lambeth £525,4740.7%2.6%
Waltham Forest £445,1100.8%2.6%
UK£217,5280.6%2.6%
Croydon £375,7490.9%2.6%
Havering £366,7960.8%2.5%
Barking and Dagenham £293,0380.8%2.5%
Southwark £487,8770.5%2.5%
Greenwich £376,6450.3%2.4%
Lewisham £413,8030.3%2.4%
Islington £602,6250.4%2.4%
Kingston upon Thames £515,1660.9%2.3%
Hackney £528,1780.8%2.2%
City of London£786,376-0.1%2.2%
Hammersmith and Fulham £715,2140.3%2.1%
Kensington and Chelsea £1,170,6620.3%2.0%
Tower Hamlets £460,5190.8%2.0%
Richmond upon Thames £698,0550.3%1.8%
Hounslow £424,0550.3%1.8%
Westminster £954,9910.1%1.8%
Redbridge £425,180-0.3%1.7%
Bexley £344,6880.7%1.7%
Brent £485,7500.2%1.4%
Camden £722,3230.1%1.4%
Barnet £537,8900.1%1.3%
Bromley £460,2430.5%1.1%
Ealing £477,3890.1%1.0%
Harrow £471,8930.5%0.9%
Enfield £403,0360.8%0.4%
Hillingdon £412,708-0.2%0.3%

Source: Exclusive Zoopla house price index analysis for City A.M.

By Harry Robertson

Source: City AM

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London house prices increase at fastest rate since 2016

London house prices jumped by nearly 5% in the year to March, the fastest rate of annual growth in the capital since 2016, according to official figures.

Prices in the capital increased by 4.7% to reach £486,000 on average.

The Office for National Statistics (ONS), which released the figures jointly with the Land Registry, said it was the biggest 12-month growth London has seen since December 2016.

Its report said: “There is some anecdotal evidence to suggest that the period between December 2019 and March 2020 has brought more certainty to the market than in previous quarters, which may have boosted transactions at the top end of the price scale.”

Across the UK, the average price in March was £232,000, a £5,000 increase compared with March 2019.

Housing market experts have previously suggested December’s general election result brought more confidence to the market, although that was before the impact of coronavirus.

The data used for the March index does not reflect the impact of coronavirus on the market, the ONS said. The figures used are based on completed house sales, which can take up to two months to go through.

The market has effectively been shut down in recent weeks and only started to reopen in England last week, with stringent guidance in place for home movers and property professionals to protect people from coronavirus.

The ONS said that, from the April figures which were due to be released next month, the official house price index will be suspended until further notice.

It said: “The impact of the coronavirus is expected to greatly reduce the amount of housing transactions that took place in April 2020, making it very difficult to produce a measure of UK house prices that would be representative of any true transaction activity within the housing market.”

It also cautioned that there may be some volatility in its March figures, due to fewer transactions taking place.

The March figures also show that average prices increased over the year in England to £248,000 (2.2%), in Wales to £162,000 (1.1%), in Scotland to £152,000 (1.5%) and in Northern Ireland to £141,000 (3.8%).

The English region with the weakest annual growth in March was Yorkshire and the Humber, where prices fell 1%.

The North East continued to have the lowest average price, at £127,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the March pick-up “reflected post-election momentum in the market, not resilience in the face of the Covid-19 shock”.

He added: “Year-over-year growth in house prices was strongest of all in London; the 4.7% rate was the biggest gain since December 2016 and put a stop to a three-year period of prices in the capital underperforming the national market.

“The market in the capital might have been buoyed by the Conservatives’ threat of increasing stamp duty for non-resident buyers of UK property soon, as well as the reduction in near-term Brexit risk.”

Mr Tombs said that when the index is produced again after the temporary suspension, “we expect prices to be about three to 5% below March’s level”.

He added: “Lenders are pulling back from high loan-to-value ratio lending, and the forthcoming rise in unemployment will force some home owners to sell up.

“That said, forced sales should be less numerous than during the last recession, as home ownership has declined, especially among low-paid workers who usually are more vulnerable to losing their jobs in a downturn.

“And the pullback in lending should be relatively mild, given that banks are well-capitalised and are incentivised by the new Term Funding Scheme to increase the size of their loan books.”

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “Not surprisingly, this is the last of these reports for a while until sales begin to pick up, and certainly on the ground we are finding that although activity is starting to gain momentum now we are returning to work, it will be some time before it is sufficient to give some credence to these numbers.”

Jamie Durham, an economist at PwC, said: “It is important to take the figures with a pinch of salt.

“We would expect the market, and in particular transactions, to remain subdued over the coming months.”

Source: Express and Star

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London house prices rebound with 2.3 per cent growth after election

London house prices grew at their fastest rate in 15 months in December following Boris Johnson’s election win, official figures showed today, as UK house prices also rose.

Homes in the capital enjoyed a 2.3 per cent rise to £484,000 after a 2019 full of falls, according to the Office for National Statistics (ONS).

The south east also posted growth of 1.2 per cent, the UK’s lowest rate of growth.

London house prices jump

“London has languished at the depths of the house price rankings for months on end but has… shifted through the standings considerably,” said Marc von Grundherr, director of lettings at Benham and Reeves estate agent.

“If ever there were a sign that the tides are turning, this is it, and it won’t be long before London starts to lead from the front once again.”

Jamie Durham, an economist at PwC, hailed London’s post-election jump after the capital’s rate of growth sank compared to the north’s.

“Price growth in London in particular has rebounded,” he said. “This may suggest an end to North-South divide in house price growth that has been evident over the last couple of years.

“Price growth rates have been trending upwards since the middle of 2019. It appears that greater certainty in the economy, particularly related to the Brexit agreement and General Election result, has unlocked pent-up demand and helped push up prices.

“Assuming everything goes smoothly during the transition period, and the economic environment remains resilient, we expect continued positive house price growth in 2020.”

All regions climb in house price bounce

UK house prices climbed 2.2 per cent on an annual basis in December to beat November 2019’s 1.7 per cent growth rate. But they only rose 0.3 per cent on a month by month basis.

The average UK house price stood at £252,000 in December 2019, according to the ONS.

It is the first month since February 2018 that all UK regions posted a growth in house prices.

Yorkshire and the Humber experienced the highest rate of growth at 3.9 per cent. The east Midlands enjoyed growth of 2.8 per cent, and the West Midlands rose 1.4 per cent.

“In particular London has returned to strong growth,” said Yopa property analyst Mike Scott. He hailed the 2.3 per cent rise as London’s best since September 2017.

“London’s average price of £482,842 is also a new record, beating the previous high of £479,942 from February 2018,” he added.

“We anticipate that it will continue to strengthen over the next few months as the renewed market confidence following the decisive election result feeds through into completed sales.”

‘Normal service resumed’

“Normal service has most definitely been resumed,” added Jonathan Hopper, managing director Garrington Property Finders.

“Such a resounding return to normality at the end of 2019 shows just how far the housing market has come since the dark days of a year ago.

“London, for so long the fallen idol of the national property landscape, has powered back not just to growth, but to become the fourth best performing English region in 2019.

“Both buyers and sellers appear to have a renewed sense of clarity and purpose, and in many areas prices are playing catch up.”

‘Nationwide revival’ underway

Sam Mitchell, CEO at online estate agent Housesimple, added that today’s figures amount to a “nationwide revival”.

“This positive sentiment has continued into 2020,” Mitchell said. “Buyers have flocked to the property market with more gusto thanks to the so-called Boris boom and greater clarity on Brexit.

“The months of March to June are typically when we see a real boost in buyer activity, though this spring awakening appears to be starting a little earlier this year.”

UK house prices rise at end of 2019

UK house prices have bounced back since the turn of the year after a subdued 2019.

Prime Minister Boris Johnson’s General Election victory has been credited as a major driver behind a 4.1 per cent rise in house prices recorded by Halifax for January.

That increase led accounts EY to raise their forecast for housing market growth in 2020 from two per cent to 2.8 per cent.

But major factors like the Brexit trade deal talks, which must conclude by the end of 2020, are still putting downward pressure on UK house prices.

And Howard Archer, chief economic adviser at EY, today sounded a note of caution on 2020 house price growth.

“However, the economy still looks set for a pretty challenging 2020 and there will still be appreciable uncertainties,” he said.

“The upside for house prices in 2020 is likely to be limited. Additionally while the fundamentals for consumers should still be pretty decent in 2020, we suspect that earnings growth will be below the peak levels seen around mid-2019 and that employment growth will be slower overall.”

Today’s UK house prices data arrives after Rightmove predicted a spring bounce that could set new house price records from March.

Rightmove director and housing market analyst Miles Shipside said: “There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month.”

By Joe Curtis

Source: City AM

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London house prices rose twice as fast as the rest of UK in 2010s

London house prices rose twice as fast as the UK average during the 2010s, a new report has shown, notching up a 66 per cent growth rate that was far faster than any other region.

In the country as a whole, the average house price rose 33 per cent over the last decade as it recovered from the financial crisis, the report from Nationwide said. The figure was far lower than the 117 per cent rise seen in the 2000s.

Andrew Harvey, Nationwide’s senior economist, said the London price expansion came “despite recent weakness”. Political wrangling caused big-ticket purchases to dry up in 2019, sending prices in London tumbling by 2.9 per cent.

Houses in Britain once again became less affordable in the 2010s as price growth outstripped the 20 per cent increase in earnings.

Price growth in the housing markets in Britain’s northern regions was weak over the last decade, with prices slow to recover from the financial crisis of 2008-9. House prices in the north grew by 11 per cent during the 2010s, for example.

“The 2010s has been the weakest decade for house price growth since the 1990s.”

Andrew Harvey, Nationwide’s senior economist

In the 1990s, house prices grew by 21 per cent. This followed an enormous 180 per cent increase in the 1980s, when policies such as Margaret Thatcher’s Right to Buy and the relaxation of mortgage lending rules led to a property boom.

UK house price growth over the last 40 years

Region1980s1990s2000s2010s
London215%40%111%66%
Outer Met222%29%95%54%
Outer SE219%18%114%43%
E Anglia227%6%115%43%
S West206%19%122%38%
E Mids244%3%120%36%
W Mids196%16%108%33%
Wales163%7%135%17%
N West183%23%124%17%
Yorks & H203%-9%137%17%
North178%9%127%11%
Scotland125%28%127%8%
N Ireland23%115%123%2%
UK180%21%117%33%

Harvey said that over the last decade it was not just central London houses that rose rapidly in price. “The neighbouring outer metropolitan region – which includes places such as Slough, Guildford, Crawley and Chelmsford – also significantly outperformed, with prices rising 54 per cent during the 2010s,” he said.

Harvey added that although London has long been the least affordable region in Britain, the issue has grown in recent years.

London’s house price earnings ratio reached 10.2 in 2016, Nationwide said, meaning a house was 10.2 times more expensive than the average yearly earnings in the region.

By 2019, it had dropped to 8.8, but this was still well above the 6.1 figure seen at the start of the decade.

By Harry Robertson

Source: City AM

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London house prices have recovered most from recession

House prices in London have recovered the most from the global financial crisis, London lettings and estate agent Benham and Reeves has revealed.

Despite the Brexit slowdown, typical prices in the City of London are 89% higher than the pre-crisis peak of August 2007, rising from £474,000 to £898,000 in September 2019.

Marc von Grundherr, director of Benham and Reeves, said: “Despite the recent negative headlines about the London housing market, the capital has made the strongest recovery from the global financial crisis and continues to do so despite wider market uncertainty.

“This recovery also seems to extend to other parts of the South East of England and while these more inflated areas may have seen a drop in the rate of price growth of late, they remain the most durable on a long-term basis.

“Proof, if it was ever needed, that the UK property market is far tougher than many give it credit for and any momentary blip caused by the current landscape will leave no lasting damage.”

Other areas in the capital where the cost of property has increased are Hackney (88%), Waltham Forest (83%) and Lewisham (83%).

Outside of London, house prices in Cambridge increased the most between August 2007 and September 2019, rising from £275,000 to £456,000.

For the UK as a whole, prices have risen by 23% over the period.

By Michael Lloyd

Source: Mortgage Introducer

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London housing market ‘showing signs of life’ as property prices increase

House price growth in London is showing signs of firming up following a period in the doldrums, according to a report.

Less than a quarter (23%) of London postcodes have registered negative house price growth in October, down from 82% registering price falls a year ago, according to Zoopla.

But the rate of annual growth in property values is slowing across the UK’s major cities generally.

Annual house price growth in every city covered by the index has now been running below 5% for three months in a row – in August, September and October.

The last time there was a three-month run of annual price growth below 5% in all 20 cities covered by the index was in 2012. It happened during September, October and November in that year.

The latest report showed annual house price growth in October ranged from 4.7% in Leicester to minus 5.9% in Aberdeen.

The October report marks the four-year anniversary of consecutive year-on-year house price falls in Aberdeen, prompted by a collapse in the oil price in 2015, Zoopla said.

Meanwhile, across London, house prices increased by 1% annually in October.

This is the highest rate of growth for London for two years, following a period of year-on-year price falls, Zoopla said.

A year earlier, house prices in London were falling by 1.1% annually.

House prices in London recovered more quickly following the financial downturn than in many other parts of the UK.

But as housing affordability became more stretched in London other more affordable areas have seen stronger house price growth by comparison.

Zoopla said the shift in London house price momentum is down to a decrease in the number of new properties for sale, which has restricted supply.

This is a trend that has been developing for the last 12 months and has been accelerated by the announcement of the forthcoming General Election, it said.

Zoopla also said there had been a “notable increase” in the number of sales agreed per agency branch – indicating renewed demand for housing in London after falling sales volumes over the past three years.

There are also signs that house sellers’ expectations are becoming more realistic.

In early 2016, when buyer demand in London started to weaken, the market grappled with a 20% gap between the price of new listings coming to the market for sale and the price of property being marked as sold on Zoopla.

The gap between asking and selling prices has been steadily narrowing it said – which should help support London house sales during 2020.

Richard Donnell, research and insight director at Zoopla, said: “The London housing market is finally showing signs of life.

“The shift in momentum is clear, resulting from a lack of supply, increased sales and more realistic pricing, which bode well for higher sales activity in 2020, rather than a pick-up in house price growth.

“While the London housing market has been in the doldrums, market conditions in regional cities have been stronger over the last two years with demand supported by employment growth and attractive housing affordability.

“The rate of growth is slowing, and all cities are registering annual growth of less than 5%.

“The announcement of the General Election has brought forward the usual seasonal slowdown, but the last few weeks of the year pre-Christmas tend to be much quieter than after Boxing Day, when consumer interest in housing springs back to life.”

Here are average house prices in October followed by the annual change in prices, according to Zoopla:
– Leicester, £180,000, 4.7%
– Manchester, £172,500, 4.6%
– Liverpool, £122,300, 4.1%
– Edinburgh, £236,700, 4.0%
– Belfast, £137,600, 4.0%
– Birmingham, £167,000, 3.5%
– Nottingham, £156,700, 3.4%
– Leeds, £167,800, 3.4%
– Cardiff, £210,100, 3.1%
– Sheffield, £138,400, 3.1%
– Bristol, £282,800, 3.0%
– Newcastle, £129,100, 2.7%
– Glasgow, £123,200, 2.6%
– Cambridge, £414,000, 2.2%
– Bournemouth, £289,800, 2.1%
– Portsmouth, £238,600, 1.2%
– Southampton, £227,900, 1.2%
– London, £476,900, 1.0%
– Oxford, £412,200, 0.0%
– Aberdeen, £154,100, minus 5.9%

By Vicky Shaw

Source: Yahoo Finance UK

Marketing No Comments

Housing market ‘in limbo’ as London house prices drop 1.4 per cent

London house prices booked a steep 1.4 per cent annual drop in August as UK house prices grew at a lower level than last year, according to the latest data.

While UK house prices posted annual growth of 1.3 per cent to beat that of 0.8 per cent in July, growth dipped below last year’s level amid a general slowdown.

London fuelled the drop as the capital suffered the UK’s biggest annual fall. followed by a 0.6 per cent decline in south east house prices.

That left the average UK house price worth £235,000 in August, the Office for National Statistics (ONS) said.

London house prices dropped to an average of £472,753.

“Annual growth in UK house prices showed a moderate pick-up in August although it remains below the increases seen throughout 2018,” ONS head of inflation Mike Hardie said.

“Wales saw the strongest growth with prices continuing to fall in London and the south east.”

Experts said the latest statistics painted a “picture of a housing market in limbo” as London suffered the worst effects of political uncertainty on the UK housing market.

“The closer we come to an apparent EU exit, the more likely it is that even the most fearless home buyer or seller will hold tight until the dust has settled,” warned Benham and Reeves director Marc von Grundherr.

“Further downward trends should be expected until the start of next year at the very least.”

Jeremy Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors, said the latest figures show a small recovery in the housing market.

“Sadly, this is nothing to get too excited about because the market remains relatively flat although of course the resilience is welcome,” he added.

Better affordability and almost record-low mortgage rates are improving buyers’ and sellers’ confidence, he added.

Brexit leaves UK house prices in ‘growth rut’
However, property lender Octane Capital’s chief executive, Jonathan Samuels, warned that Brexit has left the UK housing market in a “growth rut”.

“With Brexit hanging over it, it’s as if the property market is frozen in a one per cent annual price growth rut,” he said.

“Very low single digit growth has been the narrative for well over a year now and it’s hard to see that changing anytime soon,” he added.

“London and the south east remain the primary drag on average prices, as they pay for the riotous growth of five or six years ago.

“While the market is down, low supply and stock levels, cheap mortgages and the strong jobs market are ensuring a degree of movement.”

Brexit endgame could increase volatility
Samuels warned that UK house prices could grow more volatile as the urgency for a Brexit deal increases

“We’re now approaching the Brexit endgame and the ride could get increasingly bumpy.

“It’s possible that what happens during the next few months, even weeks, could determine the fate of the property market over the next few years.”

London house prices ‘must end boom or bust cycle’
Gareth Lewis, commercial director of property lender MT Finance, said London house prices must show more modest growth to end their volatility.

“It may be the case that London and the south east need more sensible levels of price growth in order to produce a more robust market, rather than boom and bust,” he said.

EY Item Club economic adviser Howard Archer said the data showed a “renewed softening” in London house prices. He pointed out that it is the 14th successive month of decline for the capital.

Economy ‘too weak’ to prop up UK house prices
UK house prices and London house prices could benefit from a lack of housing supply, Archer predicted.

But he warned that the UK economy may not hold up house prices for much longer, a day after the unemployment rate inched upwards.

“The government’s recent – and ongoing – initiatives to boost house building will take time to have a significant effect so are unlikely to markedly influence house prices in the near term at least,” Archer said.

“However, the labour market has recently faltered and it looks likely to continue to do so in the near term at least as companies face a soft domestic economy, heightened Brexit uncertainties, an unsettled domestic political situation and a challenging global environment.”

“With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft in the near term at least,” Archer added, predicting a one per cent rise across 2019.

PwC economist Jamie Durham disagreed, saying wage growth and unemployment remained sturdy supports for the housing market.

“But continued uncertainty in the market, related to Brexit among other factors, is likely to be dampening both supply and demand,” he added. “This is particularly the case in the capital and will likely continue to affect price growth over the coming months.”

By Joe Curtis

Source: City AM

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London house prices suffer steepest fall since financial crisis

London house prices fell at their fastest rate since the financial crisis in the third quarter, according to Halifax.

Homes in the capital saw their values sink 1.7 per cent year on year, their worst performance since autumn 2009. Meanwhile south east house prices dropped 1.3 per cent.

UK house prices grew at their slowest rate in six-and-a-half years in the third quarter of 2019, the bank’s house price index showed.

The value of British homes rose just 1.5 per cent year on year in the third quarter, a drop from 1.8 per cent in the previous three months. That is its worst quarterly increase since the start of 2013.

That left the average UK house price at £233,808, a drop from the second quarter average of £234,026.

Quarter to quarter, house prices rose 0.4 per cent in the three months to the end of September, versus a 0.4 per cent decline in the three months to the end of June.

Paul Smith, economics director at IHS Markit, which compiled the data, warned the UK housing market is still “fragile”.

He said Brexit uncertainty is stoking fears for buyers and sellers alike.

“Despite the low mortgage rate environment and rising earnings growth helping to ease affordability constraints, UK-wide house price inflation sank to a six-and-a-half year low,” Smith added.

“We suspect that political and economic uncertainty associated with Brexit continues to weigh on the market. This is especially the case in the south of England, where prices are falling and, in the case of London, at the fastest rate since the height of the financial crisis.”

Still, London house prices still remained above £480,000, almost £160,000 more expensive than prices in the south east, where buyers can expect to pay an average £323,055.

By Joe Curtis

Source: City AM

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No-deal Brexit to accelerate London house price drop

London house prices could sink up to seven per cent next year if no Brexit deal is reached by the 31 October deadline date, according to the latest research.

If the UK exits the European Union with a deal London house prices will fall by a smaller 4.7 per cent, continuing the trend of declining property prices in the capital.

Research by accountancy firm KPMG published this morning shows that the average property in the capital would cost £453,000 in 2020 following a smooth exit. However, after a no-deal Brexit the average London house price would drop to £422,000.

A no-deal Brexit would trigger a drop in house prices in every region of the UK, with the sharpest fall of 7.5 per cent seen in Northern Ireland.

The latest research shows that a drop of 10 to 20 per cent is “not out of the question” if markets react “stronger than anticipated”.

KPMG chief economist Yael Selfin said: “The housing market has been stuck in the slow lane since 2016 – with the changes to stamp duty and the uncertainties of Brexit putting the market on the back foot.

“As our forecasts show, a no-deal Brexit will see house prices decline significantly across the UK in 2020 by an average of 6.2 per cent, with more severe falls of around 10 to 20 per cent also possible if we look at historic precedents.”

Last month the Bank of England’s monetary policy committee (MPC) said that if the UK’s departure from the EU is smooth and some recovery in global growth is seen it could raise interest rates “at a gradual pace and to a limited extent, as it unanimously chose to hold the main interest rate at 0.75 per cent, where it has stood since August last year.

The committee said under no deal, the “interest rate decision would need to balance the upward pressure on inflation, from the likely fall in sterling and any reduction in supply capacity, with the downward pressure from any reduction in demand”.

In July, MPC member Gertjan Vlieghe said the bank might have to slash interest rates to nearly zero in the event of a no-deal Brexit.

By Jessica Clark

Source: City AM

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London house prices flat or falling for 16th month in a row

House prices in London have now been flat or falling for a longer period than was seen during the economic downturn of 2008 and 2009, according to an official report.

Property prices in the capital have failed to grow year on year for 16 months in a row, with the latest figures showing a 2.7% annual decrease in June, a report from the Office for National Statistics (ONS), Land Registry and other bodies shows.

This compares with 15 months of prices falling over the year in London during the economic downturn of 2008 and 2009.

However, prices in the capital recorded sharper falls during the 2008 and 2009 period than has been the case more recently, the report said.

The average London house price in June was £467,000, compared with £230,000 across the UK generally.

Across the UK, house prices increased by 0.9% annually in June – a figure unchanged from May.

UK house price growth has slowed over the past three years – mainly driven by parts of southern and eastern England.

Average UK house prices peaked at £232,000 in August 2018.

In June, average house prices increased year on year by 4.4% in Wales to reach £164,000, by 1.3% in Scotland to £152,000 and by 0.7% in England to £247,000.

In Northern Ireland the average house price is £137,000 – 3.5% higher than a year earlier.

Within England, the Midlands is showing the strongest house price growth, with prices up by 3.2% year on year in the East Midlands and by 2.6% in the West Midlands.

Howard Archer, chief economic adviser at the EY Item Club said: “We believe, with Brexit due to occur on October 31 – and it currently very unclear what will happen then – uncertainty will weigh down on the economy over the next few months at least and hamper the housing market.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “It is steady as she goes for the housing market, which is no mean feat given that it is the summer months when things traditionally get quieter and the backdrop of Brexit uncertainty.

“London is still creating a drag on average house price growth, with prices falling 2.7% over the year to June.

“However, this was an improvement on the May fall of 3.1%, suggesting price falls could be slowing and the market stabilising.”

Referring to the London market, Jonathan Hopper, managing director of Garrington Property Finders, said: “Prices in the capital are now falling more slowly, but the direction of travel remains clear.

“After 16 consecutive months of softening, sliding, and occasionally dropping, prices, the correction is still under way.”

By Vicky Shaw

Source: Yahoo Finance UK