New data from Project Etopia has revealed that house prices fell in 85% of London’s boroughs.
Amid a difficult time for the UK property market, prices in the capital have slumped by an average of 7.6% over the past year.
The past year was the second year running that house prices in London fell, where in the 12 months to December, house prices in the capital fell by 0.8% to £466,988. House prices fell 0.5% in 2017.
“Brexit has smashed property market sentiment to smithereens. Buying and selling property requires confidence but confidence, as we edge closer to Brexit, is close to zero. For countless prospective buyers, Brexit has put everything on hold,” said Jonathan Samuels, who is the chief executive of Octane Capital.
“Borrowing rates may be low and the jobs market strong, but a deep undercurrent of uncertainty is causing the vast majority of people to sit on their hands. It’s about as good a buyers’ market as it could get,” he added.
Out of the 32 London boroughs, only five saw an increase in property prices and transactions, including the City of London.
The boroughs experiencing the worst falls were Tower Hamlets (22.5%), Westminster (14.4%) and Croydon (14.5%).
“Falling transaction levels in a city like London, where affordability is a critical problem, is a sign of a sick housing market that refuses to adjust,” said Joseph Daniels, the chief executive of Project Etopia.
“Options for those seeking to buy at fair value are thin on the ground. Sellers have been encouraged to see their home as a piggy bank because of the UK’s boom-and-bust property cycle.”
“Vendors need to moderate their expectations but more importantly, policymakers must start building a meaningful number of new homes so the accumulation of wealth ceases to be the market’s main driver in the long term.”
House prices are expected to increase again, although this is expected to take up to 18 months.