It is no secret that the London property market is in turmoil. We welcomed the New Year with a new record: the number of homes sold fell to its lowest in a decade.
According to Rightmove data, average asking prices are still lower than when they were a year ago in 28 of London’s Boroughs. Over the past three years, there has been a slowdown in the UK house price growth, driven mainly by changes to the tax system.
Samuel Tombs, chief economist at Pantheon Macroeconomics said: “The stagnation coincides with the drop in consumers’ confidence when it became clear that the Brexit deal was unlikely to pass through parliament, increasing the risk both of a no-deal Brexit and a general election”.
Shares in top estate agents such as Foxtons have also been in decline. Last week, shares in Foxtons were trading down 87 per cent at 53p.
Yet simply labelling the market as being in flatline is unhelpful.
Average UK house prices have remained stagnant from last year, but this does not necessarily have to be a bad thing. Many property agents and experts agree that the slump in London house prices is due to end. Falling house prices can actually be a good thing, particularly if you are looking to jump on the property ladder.
Investments made by Silicon Valley tech giants in London has increased demand for property from wealthy US buyers. The pound’s weakness against the dollar since the Brexit referendum has also made London more affordable for US investors.
Londoners are also thinking beyond Brexit. “People are a little bit bored of talking about Brexit,” says Simon Hedley of Druce and Co, an estate agent based in central London.
London house prices are lower than before, but this may not last long. If you are worried about Brexit but want to get on the property ladder, don’t feel put off buying your dream property!