Slowest annual growth in five year
Reuters and The Guardian have reported that Nationwide announced this week that British house prices rose at their slowest annual rate in five years this month. This weakened activity looks set to remain due to modest economic growth and squeezed household budgets and is affecting the London housing market the most.
London housing market hit by the Brexit vote
The pace of increase after that is expected to be gradual, as the Bank of England assesses the effect of Britain’s departure from the European Union in March 2019.
London’s housing market was hardest hit by the June 2016 Brexit vote, due to reduced demand from foreign investors and fears for the city’s financial services industry.
This weeks’ data showed London was the only region of the United Kingdom to record an annual price fall in the second quarter, with average prices 1.9 percent lower than a year earlier, compared with increases of 4 percent or more in Wales and central England. Thus the capital continues to be the weakest spot in Britain’s housing market.
But London property prices still remained 50 percent above their level before the financial crisis in 2012, while in much of northern England there had been no overall increase over the past decade, as reported by Nationwide.
Nationwide’s Chief Economist says “There are few signs of an imminent change. Surveyors continue to report subdued levels of new buyer inquiries, while the supply of properties on the market remains more of a trickle than a torrent.
“Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.”
Although it is still easily the most expensive place to buy property, the average price of a home in London fell by 1.9% in the second quarter to £468,845.
Require help finding a home or investment property in London call either Anji on 07748 682818 or Amanda on 07944 305921. We will be pleased to chat through all the options available.