Looking beyond Brexit: London property market June update
Buy at the bottom, brokers say. The bottom is not yet in. If a no-deal exit on 31 October were to happen, house prices could drop 30 per cent in the next three years, according to the Bank of England stress test’s worst-case scenario. However, buyers of London property are looking beyond Brexit.
Lower and Lower
The property market in London is in turmoil. In the first three months of this year, prices were down 4 per cent on the first quarter of 2018, according to Nationwide, and 5 per cent down on their peak the year before. The newly-marketed houses in the capital falling in price by an average of 0.4 per cent this month.
According to Rightmove, average asking prices are still lower than where they were a year ago in 28 of London’s 32 boroughs. However, 23 boroughs are now reporting monthly increases. Based on a rolling three-month average, asking prices were up 2.3 per cent in Westminster at the beginning of June, compared with the beginning of May — up 1.5 per cent in Haringey, and 1.2 per cent in many boroughs, including Kensington and Chelsea.
These are only asking prices — and they may be inflated by pricey new developments in those areas — but there is evidence that sellers are setting more realistic prices. They have less time to wait for a deal. The average selling time seems to have peaked. In May a home spent an average of 72 days on the market before selling; down from 89 days in January.
London luxury homes in highest demand for 10 years
Luxury homes have been hardest hit during the housing downturn. Prices of central London’s prime properties — which account for the top 5 per cent of the market by value — have fallen by more than 19 per cent since 2014, according to Savills. But again, these are falling more slowly this year. In the first three months of 2019, prices were level in Mayfair and Kensington. Over the past five years they have fallen 24 per cent and 21 per cent respectively. In Notting Hill and Holland Park — both of which have seen price falls of more than 15 per cent since 2014 — transaction numbers have increased and prices have risen, albeit by less than 1 per cent. Buyers are looking beyond Brexit, property agents say.
Based on www.ft.com