London property was once synonymous with runaway price growth and eye-watering unaffordability. The average house in the British capital is now £460,000 ($600,000), so it would be a stretch to say that property is affordable for the average Londoner. But price inflation has certainly reversed. Depending on whether you are a buyer or seller, this is something you can either thank or bemoan Brexit for.
In February, the average price of a London house fell by 3.8% from the year before, the UK’s Office for National Statistics said today. It’s the steepest downturn since the middle of 2009, and marks the 12th consecutive month of flat or negative growth.
“The London sales market is in a prolonged downturn and the current uncertainty surrounding Brexit is clearly impacting consumer confidence,” Foxtons, one of London’s largest real estate agencies, said in its latest annual report. “We do not expect market conditions to improve significantly until the political and economic landscape becomes clearer.”
That uncertainty was just extended for another six months. For a while, after the 2016 Brexit referendum, the slowdown in the property market was contained to London. The capital is where there is the highest concentration of immigrants and wealthy foreign investors, who became more nervous about parking their money in the UK after the vote. Now, the slowdown in spreading. House prices in the south east of England recorded an annual decline for the first time since 2011.
In the UK as a whole, the average house price increased by just 0.6% from a year earlier. That’s the slowest rate of growth since late 2012. The average UK house was worth £226,000 in February, having peaked in August last year at £232,000.