London property market slumps amid Brexit concerns

Written by Oliver Wade

Further fears in relation to the future of London’s property market have been highlighted, with the Royal Institution of Chartered Surveyors (Rics) today forecast further price falls in the capital as Brexit concerns take their toll.

According to Rics, nervousness surrounding the current political climate and over the country’s planned departure from the European Union (EU) have prompted widespread uncertainty among buyers and sellers. The institution revealed that the number of people looking for a new property in London continued to fall in November, dropping to 21 per cent from 15 per cent in October.

Furthermore, the survey found that some 32 per cent of respondents noted that they saw a drop rather than a rise in the number of new properties being listed for sale, marking the quickest pace of decline in supply since June 2016, with the number of available properties plummeting by 24 per cent.

Looking ahead, contributors don't see any change on the horizon. Sales expectations, for the coming three months, fell from 6 per cent to 23 per cent in November, the most substantial decline in this series since the EU Referendum result.

Commenting on the survey, Rics chief economist Simon Rubinsohn: “It is evident from the feedback to the latest Rics survey that the ongoing uncertainties surrounding how the Brexit process plays out is taking its toll on the housing market. Indeed, I can't recall a previous survey when a single issue has been highlighted by quite so many contributors.

“Caution is visible among both buyers and vendors and where deals are being done, they are taking longer to get over the line. Significantly the forward-looking indicators reflect the suspicion that the political machinations are unlikely to be resolved anytime soon. The bigger risk is that this now spills over into development plans making it even harder to secure the uplift in the building pipeline to address the housing crisis."

Rics head of policy Hew Edgar added that the institution “shares the resounding sentiment of frustration” from the professionals operating within the UK’s residential sector, highlighting that it is not “surprised by this month’s outcome”.

“Brexit was always going to be a very politically charged debate, but the current style of politics and continuing level of political uncertainty is significantly impacting the housing market and built environment,” he said.

“Prior to the referendum, our research indicated that Brexit would only impact the higher end of the residential market, as the lower and middle market areas are domestically driven. Now, however, it appears that those looking to buy and sell homes across the price spectrum, as well as those looking to invest in the UK's residential sector, are putting off decisions until there is more certainty.”

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