London’s million-pound homes hit hardest by Brexit
Top-end houses in London are having a hard time to offer in the wake of the Brexit referendum, hitting prices and contributing to evidence that the capital’s home market might have peaked in the meantime.
The market for the most pricey homes was currently slowing prior to the June 23 vote and experts at UBS believe the referendum dented confidence better.
The number of houses under offer has dipped considering that the vote CREDIT: UBS
As an outcome the variety of properties under offer has fallen considering that the start of July, while the number on the marketplace without such purchaser interest has begun to climb up, and reversing sharp falls seen previously in the year.
UBS looked at the ratio of properties contained on the marketplace compared to the number that are offered based on contracts being exchanged, as an indicator of the number of buyers compared with sellers, and the quantity of time a property should invest in the marketplace prior to being offered.
The situation is most plain for homes costing more than ₤ 1.5 m, a market that is mainly London-based.
A year ago there were roughly four-and-a-half times as numerous such homes on the market as there were houses sold based on contract. That climbed up in the early months of this year and got again after the Brexit vote, with the ratio now at a brand-new high of more than 7.5 times.
By contrast, the more affordable end of the market– mainly outside London– has hardly altered, indicating buyer interest has actually not been reduced by the referendum.
The ratio for homes costing below ₤ 150,000 has remained just below one-times because February, and although the ratio for those costing between ₤ 150,000 and ₤ 250,000 has actually approached, it too remains listed below the one-times level.
UBS thinks this suggests the London housing market has been most impacted by the Brexit vote.
Its experts expect the number of deals in the capital to fall by 6pc in 2016 and 10pc in 2017, causing house prices in London to fall by 10pc by the end of 2017, before the market resumes its upward trajectory.
The most pricey homes are hardest to offer, while cheaper homes, often outside London, are still popular CREDIT: UBS
The prediction comes as building and construction company Berkeley Group cautioned that the government’s real estate policies are harming London’s market, with increased deal expenses such as a stamp duty hike for landlords striking sales.
Restraints on building and construction are also destructive, the business said, pointing the finger at the Community Facilities Levy charged by regional councils on freshly constructed houses.