London’s housing market isn’t growing anymore. Here’s why
Political uncertainty weighs on demand
The era of skyrocketing home prices in London may be over. Blame Brexit.
Prices rose a mere 1.6 percent in August compared to a year earlier, Bloomberg reported, and PricewaterhouseCoopers expects growth to slow even more in 2018 and 2019. Ten out of 14 economists interviewed by Bloomberg blamed political and economic uncertainty, largely connected to Britain’s vote to leave the European Union, which could lead to a jobs exodus.
“It’s not just a question of how many financial-services jobs will move, but also associated professions such as legal services,” Samuel Tombs of Pantheon Macroeconomics told Bloomberg. “It’s not the disaster that some were predicting and we expect London home values to remain stable but not fall over the next year.”
Berenberg Banks’ Kallum Pickering said that a new-ish stamp duty on home sales also had an impact and that there were already “exceptionally low property yields at the time of the (Brexit) vote.”
London competes with New York for wealthy apartment buyers, and the Brexit vote last year had some brokers cheering because it could shift demand to the Big Apple, as reported by The Real Deal. [Bloomberg] — Konrad Putzier