London house prices are set to drop as much as two per cent this year, according to a report from PwC which suggested fresh evidence of a slump in the capital’s property market.
Analysis from PwC that has been published today predicted a fall in London house prices that could persist into 2019, despite property prices in every other region of the UK expected to increase.
When talking to City A.M., Knight Frank head of London residential research Tom Bill said: “London is now underperforming after years when London would outperform the rest of the UK. That situation has now reversed.
“The overall picture is one of low interest rests, low levels of unemployment and relative lack of supply which are all putting upward pressure on prices.
“But a lack of supply also lead to affordability constraints, which is one reason why London is underperforming compared with the rest of the UK.”
While the accountancy firm estimated that the average property price in the UK will jump from £221,000 last year to £285,000 by 2025, an increase in the capital is not expected for another 18 months.
PwC senior economist Richard Snook stated: “Affordability in the capital has been stretched due to three factors: a high deposit saving hurdle, increased economic uncertainty relating to Brexit acting as a drag on international investment, and reduced numbers of housing transactions due to stamp duty charges.”
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