Oxstones Investment Club™While there are signs that the National UK housing market hasn’t lost too much steam during August and the early weeks in September, that’s in stark contrast to the London property market.
“London property prices haven’t really recoveredsince the June referendum, which has led to a divergence in the direction of house prices compared with the rest of the UK,” said rent guaranteed specialists, Assetgrove.
A number of surveys for August and September have reported that house prices have held up well during the seasonal summer lull and the shock of the EU referendum, result. But, London house prices, particularly in the luxury end of the market, such as Kensington and Chelsea haven’t been quite so upbeat.
Take the latest survey from the Royal Institution of Chartered Surveyors (RICS). On a national level, house price growth picked up in August to a balance of +12 from July’s +5. That indicates 12% more responding surveyors have reported an increase in house prices than those who said prices fell during the month.
For London, however, the picture was much less upbeat. “In London, the price net balance remained in negative territory for a sixth consecutive month,” the RICS said.
Online estate agency Rightmove’s September report, meanwhile, is a little less downbeat on London, but the different remains. On a national level, the average asking price for property for sale on its website in the four weeks to September 10th was 0.7% higher than in August and 4% higher than September 2015.
For London, the picture was less positive, with the average asking price for London property 1.9% higher than in August and 1.8% higher than a year earlier. The monthly gain follows four consecutive months of price declines and only partly recoups some of the cumulative decline over that period.
“The property market has changed significantly over the years, especially after the referendum. It is becoming increasingly difficult for people to purchase property in London. London’s luxury property market is suffering and prices that were achievable nine or so months ago are out of the question now, especially with first time buyers trying to get onto the property ladder,” said Robert Holmes, estate agent in Wimbledon.
Within the details of the London market, the survey uncovers that prices in one of the cheapest London borough of Barking and Dagenham were 11% higher than a year earlier. Meanwhile, for the city’s most expensive region, Kensington and Chelsea, property asking prices were 11.7% lower than September 2015.
“These divergences between top and bottom summarise the extremes and very different forces at play in London,” said Rightmove’s Miles Shipside.
There are two clear reasons for the sluggish price growth around London and outright declines in some of the more expensive neighbourhoods. The first that came into play were the new charges faced by buy-to-let investors introduced by then chancellor of the exchequer George Osborne.
The second is the uncertainty the vote for Brexit has unleashed on London as one of the world’s financial centres. With no knowledge whatsoever available as to what the future holds for the UK’s trading relationships and plan for working with the European Union, investors of all types are unwilling to buy property at the premium prices that were being achieved at the beginning of the year.
“The double-hit of developments has certainly made investors re-evaluate what they’re willing to pay for luxury property in London,” said Newington Green based estate agent, M&M Property.“Unfortunately, there is currently no end in sight to the detrimental impact of the referendum result on London property prices.”
Tags: assetgrove, Brexit impact on London property prices, declines in the luxury high-end London property markets, detrimental impact of the referendum result on London property prices, finance, investment, Kensington and Chelsea property market, latest survey from the Royal Institution of Chartered Surveyors (RICS), London property price trends, M&M Property, National UK housing market, Online estate agency Rightmove’s September report, price divergence for UK and London properties, property, real estate, rent guaranteed specialists, RICS property price report, UK property market commentary