Brexit Affecting London’s Housing Market

The weakness of London’s property market was further exposed this week, with reports of sellers under pressure and realtors warning of difficult conditions.

According to property-website operator Rightmove, all but two of London’s 32 boroughs have seen asking prices drop in the past year as Brexit uncertainty continues to bite in the capital. Estate agent Foxtons said revenue fell in the first quarter and housing market in the city is “very challenging.”

“Sales volumes continue to be at record low levels and ongoing Brexit uncertainty is impacting consumer confidence,” the company said.

The Rightmove report showed that prices for newly marketed homes have dropped 2.5% in the past 12 months, meaning sellers are seeking an average of 16,157 pounds ($21,000) less for their properties.

In Kensington and Chelsea, where the average price is about 1.6 million pounds, asking prices have come down 3.9%, or about 65,000 pounds. Only in Barking and Dagenham and Bexley, among London’s least expensive areas, did prices gain in the period.

“It’s a strikingly accurate reflection of the current London market that the only two boroughs to see new seller asking prices higher than a year ago were the two cheapest last month,” said Miles Shipside, Rightmove director and housing market analyst.

While prices rose 1.2% in May from the previous month in the usual spring-time boost, the annual figures underscore the downbeat mood in the London market, which has seen values hit by Brexit, slowing growth and tax changes in recent years.

Nationally, the picture is brighter with prices seeking out a small annual gain, and Wales, the midlands and northwest setting record highs. In May alone, asking prices rose 0.9% to an average of 308,290 pounds, Rightmove said.