One in three chance of a house price crash, experts suggest
Property prices in London will fall this year and next and will fall sharply if Britain fails to reach a deal ahead of its scheduled departure from the European Union in March 2019.
The quarterly poll from Reuters revealed around 30 housing market specialists believe house prices in the capital – where foreign investors have previously fuelled skyrocketing prices – will fall 1.6% this year and 0.1% next.
Commentators suggested Central London was suffering because traditional international buyers were staying away while domestic buyer numbers also continue to fall.
Uncertainty over how Brexit negotiations will pan out has already spooked foreign investors, the survey taken in the past week found. When asked what effect a disorderly departure would have on London prices, responses ranged from “short-term fall” to “damaging” to “disaster”.
Ray Boulger at mortgage broker John Charcol said the “additional uncertainty” will disproportionately affect London in the short-term, pushing high value properties in particular to fall further.
Sterling fell to a near one-year low against the euro on Tuesday but where a weaker currency should make UK houses more attractive to foreign buyers, Brexit uncertainty is keeping them away.
On the likelihood of a “significant correction” before the end of 2019, almost one in three of those polled suggested it was probable.
The findings also echo predictions from Savills that London prices will fall by 2% this year and data from London Central Portfolio showing London transactions down on last year.