Analysis this year shows that not only are property prices falling in London but are beginning to do the same for England and Wales in a new report by PropertyWire.
As result of the uncertainty of the Brexit negotiations home owners are on edge about placing their homes on the market and depending on the chances of a rough landing Brexit outcome the economic impact on the housing market could impact negatively for long period the LCPA residential index finds.
Excluding the greater London housing market England and Wales price growth is at its lowest since 2013 at 0.7% in the final quarter for 2018 thus making the average home price at £262,126 and the largest sale drop since 2008 by 3.7%.
New construction of housing has seen sales of new builds climb 3.6% year on year to an average of £299,617 or a 14.8% increase when compared to existing home sales prices.
New build averages for prime housing in central are at £2,268,219 or a premium of 61.4% over existing homes for sale and similar to Greater London sales fell 46.1% with 73 transactions and price declines of 29.6%.
As for Greater London prices declined by 1.9% in final quarter of 2108 with an average price of £610,708 with sales also declining by 4.8%. For new build homes prices increased by 20.4% to £661,677 with sales dropping by 18.2% a level being the lowest since 2015.
Averages for the London prime central market saw average home prices drop by 12.7% on a per quarter basis to £1,812,051 and total annual transactions declining by 16.5%.
New build average prices were £2,268,219, a 61.4% premium over existing stock and as with Greater London, sales fell, down by 46.1% to just 73 and prices fell by 29.6%.
Naomi Heaton, chief executive officer of LCP, says:
'On a more optimistic note, there has been evidence of a pickup in interest as investors seek to capitalise on extremely soft prices. However, with Brexit rolling on beyond March and neither the Prime Minister nor European Union leaders able to state what is going to happen, investors may now wait to see if sterling weakens further. This limbo continues to have a suffocating effect on prime central London and is now extending to the whole of the UK property market.'
‘The circus that is Brexit also continues to derail many people’s plans to move or invest. Some positive news may provide the impetus to get the Greater London housing market moving again. Although annual prices for new builds have increased, Brexit has not done anything to improve the flow of new developments.’
‘The low level of transactions throughout the UK is already having a damaging effect on estate agents. With sales figures so low, many rely more and more on their lettings departments. With the imminent ban on tenant fees coming into effect on 01 June 2019, agencies are going to suffer reduced revenue at a time when many are already struggling.’
‘It is also likely that many tenants will hold back any move until this date passes. The combination of low sales volumes and reduced revenue may well bring further agency consolidation and closures throughout the rest of 2019.’