Property values in London contract by 3.8% as Brexit uncertainty holds back house price growth

Published by Stephen Little on 18 March 2019.
Last updated on 18 March 2019

House prices stall in London, while the North fares better

Brexit uncertainty has hit the traditional spring property bounce, knocking thousands off house prices across the UK, new analysis shows.

Annual house prices fell by 0.8% in the year to March, according to property website Rightmove.

The average asking price for a property was £302,002 in March, up 0.4% from the previous month but down more than £2,000 from this time last year.

This is the lowest average monthly rise at this time of year since 2011, with London being the main drag on national house prices.

Rightmove says that with the number of sales agreed by estate agents also falling below this time last year, Brexit uncertainty has at best delayed the usual spring bounce.

Miles Shipside, Rightmove director and housing market analyst, says: “While March marks the start of spring, temperatures have yet to rise in the housing market.

"Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate."

Regional trends

Asking prices in the capital are down by 1.1% on the previous month and 3.8% annually, with inner London the biggest hit. Prices across the South East have fallen by 1.5% in the past year.

The North East was the only other region to record a monthly fall, down by 1.3%.

Scotland recorded the biggest monthly price rise at 3.1% to an average price of £153,174, followed by the North West where prices rose by 2.2% to £196,350.

Wales, the South West, the West Midlands, and Yorkshire & the Humber all recorded average monthly prices arises above 1.3%.

London asking prices are 68% higher than they were 10 years ago, while those in the North East of England have gone up by 8% over the the same period.

Shipside says: “London and some of its commuter belt are suffering from a post-boom hangover, with prices now having to be far more sober to attract buyer interest.

"In contrast, North East prices never had the opportunity to become intoxicated by the capital city’s heady mix of high demand, low interest rates and higher salaries.

“There’s greater resilience the further away you get from the London market, and there’s a sound bedrock of demand for the right property at the right price, reinforced by ongoing housing needs combined with cheap mortgage borrowing.”

UK house prices in March

Source: Rightmove March 2019

Brexit uncertainty

With the clock ticking down towards the Brexit home buyers are becoming more hesistant. The number of sales agreed by estate agents in February was 7% below the same period in 2018, compared with a year-on-year fall of 4% recorded in January.

Tom De Ville, director at Fine and Country Nottinghamshire, says: “A more certain political outcome would help to reassure those currently hesitating and would help to get the wheels turning more quickly again as well as boosting much-needed supply.

“Houses that are priced sensibly are still selling but there are some sellers who haven’t realised that there’s been a shift I npower from a sellers’ market to a buyers’ market.”

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