Brexit fears are driving London home prices down: report

UK-based Cebr predicts 5.6% plunge next year

Kyoto Garden in London (credit: Alan B. via Foursquare)
Kyoto Garden in London (credit: Alan B. via Foursquare)

London home prices are falling down, falling down, falling down.

Property values in London are forecast to fall next year as the uncertainty surrounding Brexit strangles the market, according to the U.K.-based economics consultancy Centre for Economics and Business Research (Cebr).

Home prices, especially in London’s priciest areas, are predicted to drop 5.6 percent in 2017, according to Cebr’s research. Property values across the United Kingdom are set grow 2.6 percent next year, down from 6.9 percent in 2016, Bloomberg reported.

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The slowdown is expected to begin in the fourth quarter of 2016 and continue into the next year, Cebr economist Kay Daniel Neufeld told Bloomberg.

Inflation, increasing unemployment and slowing business investment are all factors weighing on housing prices and demand from international buyers, in the wake of June’s vote to leave the European Union. Investors are increasingly nervous about the possibility of a hard Brexit, if the U.K. fails to negotiate a trade agreement with Brussels that would keep it in Europe’s single market for goods and services. [Bloomberg]Chava Gourarie