London property prices are falling because of Brexit

The number of cuts to asking prices surged by 163 per cent in the 12 days following the referendum

Zlata Rodionova@zlata07
Monday 18 July 2016 10:35
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Buyers from the eurozone gained a €50,900 (£42,000) discount on the average London house price in the wake of the referendum result
Buyers from the eurozone gained a €50,900 (£42,000) discount on the average London house price in the wake of the referendum result

London property prices are falling following UK’s vote to leave the EU.

The vote triggered a wave of discounts as nervous owners slashed their asking prices following the surprise victory of the Leave campaign.

The number of cuts to asking prices surged by 163 per cent in the 12 days following the referendum, compared to the 12 days ahead of the vote, according to figures from LondRes, a property research firm.

But the post-Brexit discounts have failed to encourage people to buy.

Completions, measured as the day money has been transferred and the purchaser can move in, fell by 18 per cent before the vote on the EU membership. The numbers were down by 43 per cent compared to a year earlier in London’s 30 most central postal districts.

The figures suggest that vendors have come to terms with the fact that they must drop asking prices to offload homes. Buyers, on the other hand, are becoming more demanding as they want to secure deals that will protect them from potential price falls.

“This is a very, very different market to a week ago. I’m now trying to do deals 10 per cent below where they were a week ago and central London is already down 10 to 15 per cent from its peak,” Henry Prior, a buying agent said the week after the referendum.

A downward trend in house sales is expected to continue through the summer as buyers put off their plans amid uncertainty, according to the Royal Institution of Chartered Surveyors.

Surveyors said house sales were down in June and are expected to drop another 26 per cent over the next three months in the most negative reading since 1998.

The Brexit vote has however triggered an interest from overseas property buyers.

Estate agents in the UK have been swamped with calls from Chinese, Middle Eastern, Italian and Spanish buyers looking for a bargain after the pound tumbled to 30-year lows in the week after the EU referendum, making the exchange rate very favourable for foreign buyers.

Buyers from the eurozone gained a €50,900 (£42,000) discount on the average London house price in the wake of the result, according to Stirling Ackroyd, a London estate agent.

“European buyers can now snap up real bargains across London. Overnight London has become a more affordable global property hotspot – particularly for those paying in euros,” said managing director Andrew Bridges.

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