London house prices fall again, Brexit effect?

400Two separate house price surveys published Monday, report a further decline in London property prices in September and October. According to the monthly house price index from Acadata and LSL Property Services, the average house price in England and Wales fell 0.1% on the month and rose 1.3% on the year, in September. However, excluding London and the south east, annual house price inflation was 3.3% higher. In August, the survey recorded a 0.2% monthly drop and a 2.1% year-on-year increase.

In recent months, many of the global banks have started to reveal details of their plans to relocate jobs away from London to other financial centers in Europe, afraid that the U.K. and EU won’t be able to agree terms of engagement for the post-Brexit period before the U.K. leaves the EU in March 2019. In a speech earlier this month, Prime Minister Theresa May had set out proposals for a two-year “implementation phase” that would essentially have let the City of London keep all its existing privileges for another two years. However, the EU refuses to start talks on future trading arrangements until it sees “sufficient progress” on the settling of the U.K.’s outstanding financial obligations to the EU. The EU’s chief negotiator Michel Barnier said last week that the talks were effectively ‘deadlocked’.

Another sign of the pressure is that bigger, swankier properties are being hit harder than smaller ones. Rightmove’s ‘top of the ladder’ segment was down 8.6% on the year to October, while properties for first-time buyers were down only 1.7%.

By contrast, much of the rest of the U.K. is showing a different picture, with prices rising more than 3% on average as compared to September last year. Despite falling prices in the capital, London remains the most expensive place to buy a home in the country.


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