London Housing Meltdown Spreads as Pre-Brexit Angst Batters Market Sentiment

“If you are looking to buy a house in Q1 you will have the market to yourself.”

In some places, in particular prime markets in London and the south-east, house prices have been tumbling. According to London-based estate agency LonRes, average “achieved” prices:

  • In Prime Central London: -6% in Q4 2018; and -14% from their 2014 peak.
  • In slightly cheaper Prime London districts: -5% in 2018.
  • In Prime Fringe districts, i.e. prime sectors further removed from the city center: -7% in 2018.

In a survey by LonRes, 63% of the agents said they had seen prices in their market plummet by 10% or more from peak levels as sales ground to a standstill. In London transactions slumped by 9% between 2017-2018 for properties under 1 million, by 25% for properties between £1 million and £2 million and by 12% for properties between £2 million and £5 million.

Another indicator flashing red is the Royal Institution of Chartered Surveyors’ house prices balance, which measures the gap between the number of estate agents and property surveyors expecting increases and those anticipating decreases. It crashed to -22% in January, its lowest level since March 2009. The sales expectations balance for the next three months reached its lowest level since the survey began in 1999, dropping from -28% to -32%. Here are some more standouts from Rics’ report:

  • Agreed sales dropped further in January, with the pace of decline “seemingly gathering momentum compared to December results.”
  • The average time taken to sell a property, from listing to completion, reached 19.4 weeks.
  • Northern Ireland and Scotland enjoyed the strongest price expectations for the next twelve months, followed by the North West of England and Wales.
  • Contributors in London still see house prices falling over the next year

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