A poll of housing market experts suggests London house prices are likely to fall this year as a result of Brexit uncertainty deterring buyers.
The survey of 30 specialists taken in May by news organisation Reuters predicts prices rising 1.7 per cent across the UK this year but falling 1.0 per cent in the capital - if it comes true, Reuters says this would be the first London-wide price fall for a decade.
Reuters quotes Knight Frank associate Oliver Knight saying: “There is a lot of uncertainty in the market as to where we are with Brexit negotiations. That has really kept a lid on further growth. There is a wait-and-see attitude. We will see a slightly better performance in 2019 as the pressures between supply and demand really start coming together.”
The most common reason cited for the capital’s dip was Brexit, although other reasons given included stamp duty and sale fall-throughs.
“There is [also] evidence to suggest that the phasing out of mortgage tax relief for buy to let owners has hammered the market. This will let some much needed air out of the market, particularly in London and the south east” says Peter Dixon, an economist at Commerzbank.
So when asked to rate house prices, on a scale of one to 10 where one is extremely cheap and 10 extremely expensive, respondents gave a median of nine for London and seven nationally.
“UK house price/earnings ratios are very high, but taking into consideration low interest rates affordability looks relatively normal” says George Buckley, chief UK economist at Nomura and one of the experts surveyed.
Buying agent and market commentator Henry Pryor has indicated on Twitter that he is one of the 30 experts polled quarterly for this survey, and that he agrees with the latest results.
However, the experts believe that house prices will rise 2.0 per cent nationally and 0.5 per cent in London next year, and then in 2020 another 2.0 per cent up both in the capital and across the UK.