The managing partner of a property investment firm says London residential property values have fallen by 15 to 25 per cent since the EU referendum with some vendors wanting a quick sale being obliged to slash 30 per cent off their asking prices.
George Kachmazov, managing partner at Tranio - an agency that specialises in helping overseas buyers - says “hose wishing to sell quickly, those working with properties that are particularly tough to sell and those who want to sell properties to wholesale buyers are facing pressure to offer massive discounts compared to pre-referendum prices.”
Writing on the London Loves Business website, Kachmazov insists that London remains an attractive international real estate investment, despite Brexit, because the city is likely to remain an international financial centre in the long term, has a growing population and commuter belt, and has affordable loans because of its low interest rate.
He says that Brexit “dealt a crippling blow to London’s property market” but that there are silver linings to the issue.
Firstly, the weak Sterling value has been good news for overseas buyers. “A £1m property would have cost a Russian investor 97m rubles in May 2016; by late October, that figure had slid to some 76m rubles” he says, adding “Chinese investors would have paid 10m yuan for a £1m property in June 2016. By October, that figure had fallen to some 8m yuan.”
Secondly, Kachmazov says in the long-term London prices are likely to appreciate again - although he warns a further fall in values may come first. “Tranio forecasts that prices in central London may drop by an additional five to 15 per cent in 2017-2018, but are likely to stabilize after that, and to begin to rise again in subsequent years” he writes.