Hello, Quartz Index readers!
The London property market is notorious for its eye-watering prices but this might finally be changing.
There are some very tentative signs that house prices in the UK capital are cooling. Official data published this week showed that the average house price in London is £472,000 ($621,000). While that’s still more than double the average for the UK as a whole, the pace of price increases in London is slowing. For the second month running London wasn’t the region with the fastest-growing property prices.
Now that Brits have voted to leave the European Union, the property market is expected to take a hit. Real estate agents are already reporting a drop in property sales and one of London’s biggest realtors, Foxtons, said it didn’t see sales picking up again this year.
The uncertainty of Brexit has also infected the commercial property market where prices dropped the most in seven years in July. Norway’s sovereign wealth fund (which is the biggest in the world with $880 billion in assets) owns extensive amounts of London real estate and said the referendum result has made it too difficult to value its holdings. So it’s assumed the worst cut the value of everything by 5%.
But first time house buyers shouldn’t get too excited yet. Even some of the most pessimistic predictions don’t see London house prices falling significantly as undersupply, overpopulation and government house-buying schemes will probably prop up demand.—Eshe Nelson
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