By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


More branch closures likely if Brexit uncertainty goes on - forecast

The closure of Foxtons’ Park Lane office and five other branches in the capital are merely the start of things to come warns leading investment consultancy London Central Portfolio.

The reason, it says, is a slump in transactions in Prime Central London - they fell to just 3,671 in the year to October - that’s just above 70 sales a week, representing a 15.4 per cent collapse in one year and a huge 40 per cent drop on 2014.

It means the market’s performance now is worse than during the global financial crisis.


“Transaction levels continue to have a very real effect on London estate agents” says the latest LCP report, which also refers to a market analysts’ report suggesting that 27 per cent of High Street agents are struggling to survive. 

“As the PCL market has seen the most dramatic fall in transactions across the UK over the last few years, it is likely that it will not be the last we hear of this in the coming months” warns LCP.

However, the consultancy says that at last there are some signs of increased activity in PCL “as price discounting seems to have reached a level which investors are finding sufficiently compelling to re-enter the market.”

LCP suggests that the average annual prices in October in Prime Central London - excluding new builds - is now £1,870,774; that’s actually 4.2 per cent more than a year ago.

Across Greater London the average price now stands at £631,987 - “prices on an annual basis have stalled completely with an increase of 0.8 per cent” says LCP.

Transactions in Greater London are at their lowest levels for some years and now stand at 89,096. This is a fall of 5.6 per cent over the year and 25 per cent down on 2014. Sales of new builds have also fallen a massive 15.5 per cent over the year.

“No doubt, this a contributing factor to the strife that estate agents are currently having to weather. Countrywide, the UK’s biggest estate agency, has seen their share price fall by 98.5 per cent over the last four years” explains the latest LCP report.

“On top of this, there are still many hurdles to jump in the Brexit negotiations and there is still no final road map on the table. This is not the news that the market needed to hear and it is hard to see any light yet at the end of the tunnel, with so many vested interests at play both in the UK and EU.”

The consultancy says it is unlikely that any significant market reversal will be seen until there is more clarity over Brexit.

Poll: Will more London agencies shut branches because of Brexit?


  • Michael Riley

    Rather than fueling demand, low interest rates are the key ingredient to the market stalling. They allow many sellers to sit on their hands, rather than sell and ride out the storm....

    Until interest rates stabalise at "normal levels", the market will continue to be highly distorted and volatile in terms of supply and demand.

    Whilst many of us have enjoyed the benefits of this, we are going keep seeing these unusual patterns every few years ( and probably a massive crash at somepoint), as market has not been allowed to perform its natural cycle.

    Lets hope Brexit doesnt lead to the UK having a significantly worse credit rating and we have to increase rates sharply, to borrow on the money markets.

    Have a nice day!

  • Richard Rawlings

    Don't let this derail you! Wealthy Prime Central London buyers have a greater stake in the Brexit outcome/uncertainty, but most people are not in that league. During the last recession transaction volumes in most markets fell until it was only those genuine serious buyers and sellers who remained. It was a shock at the time but that situation has not changed much; there is not much further to fall in terms of volumes and most agents have adapted to this. Indeed, the Brexit issue has created an environment where sellers are likely to be more flexible on price, and the need for a good estate agent is becoming increasingly evident, and I see fees already beginning to rise. Brexit? What Brexit? - You've got a business to run! Have a great day.

    Simon Shinerock

    Good message Richard

    Michael Riley

    I appreciate you have a commercial position to take Richard.

    I'm happy to have a private bet on transaction numbers falling further. :) generally speaking, the market has been shrinking since 2006 and this will continue whilst the buy to let sector holds onto stock.

    The less stock available, the less that is attracted to come to the market.

    This combination of contraction in supply and cheap money is what has underpinned prices in the market since the credit crunch.

    Supply is a far more powerful lever than demand in the housing market in the UK at least.

    I agree in the need for "good agents" and should be there a flight to quality.

  • Richard Rawlings

    Good points Michael and I agree that contraction of supply and cheap money has upheld prices.

    I wonder if the BTL sector might actually divest itself of stock in view of a more challenging taxation regime as well as worries that their equity could also be eroded by potentially falling prices?

    Michael Riley

    Certainly, older private BTL will off load, if market was stronger. Their position is at best "hold" rather than "buy".

    They and "additional" home owners are the prime target of goverment to increase supply, as new build policy is flawed.

  • icon

    London. London. London.

  • icon

    There is a world outside of London which is affected by the Westmonster bubble. If an area overheats it's cooling off is greater. Thankfully that isn't the rest of the UK. It's a shame the politicians don't realise that it's different outside London then we might get better policies and less government interference.

  • Bruce  Patterson

    Agreed Richard and hope you are well - haven’t heard any clients citing brexit as a reason to move or not - people have to move home for all the usual reasons and with current tax regime in place less speculators distorting the market. Privately held/highly geared BTL will offload once reality of theircreduced ROI kicks in so transaction levels should rise moderately over next 18 months. As Warren Buffet says ‘ uncertainty brings opportunity ‘ so good luck to all next year ! Touch wood - if we can survive 2008 then we survive anything !

  • Nathan Khider

    Agents could easily keep their shops open by renting it out as hot desks and shared space. After all they are in the property rental business


Please login to comment

MovePal MovePal MovePal
sign up