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House prices fall in London while North West and Scotland thrive

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Written by: Max Liu
18/03/2019
Asking prices on properties across the UK increased marginally for the third consecutive month as March saw a 0.4% rise, according to the Rightmove House Price Index.

There was also a reduction in the average time that it took to sell a property across the UK and a drop in prices for first time buyers in London.

Overall, asking prices fell by 1.1% across the capital and by 5.5% in the inner London area which comprises eight central boroughs. Industry figures have linked the fall in London property prices to the Brexit uncertainty.

However, in Scotland and the north west of England asking prices grew by six and eight times the national average respectively.

North west and Scotland ‘on fire’

While London bears the brunt of the Brexit impasse, things are looking up elsewhere in the UK, according to Andy Soloman, CEO of Yomdel, a mystery shopping and market research firm.

“The property market in Westminster is on its knees but in contrast, the North West and Scotland are positively on fire,” he said.

“The Midlands, Wales and Yorkshire are also more than holding their own and thankfully the fragmented nature of our property landscape means these front-runners are holding the proverbial head of the UK market above water.

“We expect that this will continue to be the case with no real signs of life returning to London and the South East until a deal is done and an exit is made. Which is unlikely to be any time in the near future.”

Brexit link

Industry figures were quick to cite the ongoing uncertainty around Brexit as a key factor in the fall in prices in London.

Marc von Grundherr, director of Benham and Reeves, said: “It would seem that the London market continues to see the price expectations of its home sellers reduce on an on-going basis as a result of wider political and economic influences.

“This is most prevalent across the inner boroughs of the capital where prices have spiked previously and so any adjustment, Brexit induced or otherwise, is always going to be fairly drastic.

“However, with the news that a no-deal Brexit is now off the table, we have seen strong interest from both domestic buyers and foreign investors in the last few days. Should this persist we could see the pulse of the London market strengthen as the year goes on.”

Momentum beginning to build

Alastair McKee, managing director of One77 Mortgages, also pointed to Brexit, although he believes there are signs that confidence is coming back into the market.

He said: “We’re still far from out of the woods where Brexit is concerned and we will continue to see asking prices adjust to more natural levels to account for this.

“However, while they may be some way off historic peaks, three consecutive months of positive growth suggest that a degree of confidence is returning to the market.

“When you couple this with the fact the average time to sell has also dropped it suggests momentum is beginning to build for the year ahead.”

 

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