Property prices in London continue to fall

Asking prices for properties in London continued to fall, declining by 1.2% last month. A slight drop is observed in the whole of the UK, while a slight 0.2 percent. However, after more than 1.5 months after the referendum, it became clear that the 45-month sustained price rally up has ceased and prices started correcting from their highs reached before the referendum.

In the report submitted by the Agency of the real estate Home.co.uk shows that the annual growth of prices for real estate in England and Wales stopped and dropped to 5.3% yoy, the supply of new housing are increasing gradually.

The obtained data allow to assume that in the market there is a lack of sellers, which led to a substantial concessions on prices for the first time since 2012. In the Southeast prices fell by 0.2% last month, and in Scotland to 0.5%.

The breakdown of the figures by region shows that there are regions where prices are rising. So, in the North East prices increased by 1% in the West Midlands 0.8% in the East of England by 0.6%.

In General, UK prices are now 5.3% higher than a year earlier and while the situation on the markets fairly quiet . In connection with the Brexit, we are unlikely to see price growth until the end of the year.

Of course, the decision of the British to leave the European Union made nervous by many investors. You should carefully observe the market of real estate of London, which, as usual, is a powerhouse for the UK property market. In the market of real estate of London deliveries increased by 27%, East 19%, and 19% – in the South-East. If the real estate market of London is too much housing for sale, it is possible that it will cause panic of investors, which will spread to other regions of England.

The decision of the Bank of England to lower its key rate to 0.25%, of course, should have a positive impact on the market. But for most borrowers is the rate and the initial Deposit, which is too much for young British people. Meanwhile, early indicators show that banks can raise deposits, trying to hedge their risks in the face of uncertainty. In addition, the Bank of England has already warned that it expects a decline in wages and the loss of over 250,000 jobs, which is also negative news for the real estate market of the United Kingdom.

The fact that dramatically increased the number of new objects in the market of real estate of London , South and South-East England, suggests that many investors have left the market, putting your property for sale, which is unlikely to drive prices.

® Helen Entree. 13.08.2016 G.

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