The Strategist

Analysts note the longest fall in London real estate prices since 2009

04/01/2019 - 14:52

Analysts recorded the most noticeable drop in real estate prices for many years in London and England against the backdrop of a political crisis and uncertainty due to the UK leaving the EU.

According to Nationwide Building Society, in the first quarter of 2019 property prices in England fell by 0.7% on an annualized basis compared to the same period in 2018. For England, this is the first decline in property prices in annual terms since 2012.

Property prices in London have fallen by 3.8% compared with the first quarter of 2018 for the first three months of the year. This is the most serious fall in housing prices over the past 10 years for the capital of Great Britain.

Robert Gardner, chief economist at the Nationwide Building Society, noted in his comments on the publication of data on the housing price index that the decline in consumer confidence played a major role in the deteriorating situation in the real estate market. He also stated that inquiries about home purchases from primary buyers fell to their lowest level since February 2008.

In general, the cost of real estate in the British capital still remains much higher than the previous peak reached in 2007, on the eve of the 2008 financial crisis, and higher than the average for the UK as a whole. The average cost (for all types of apartments) of housing in London in I quarter of 2019 amounted to 456 thousand pounds sterling ($ 594 thousand).

A number of experts note the protracted nature of the price decline: the cost of housing in London has been falling for seven quarters in a row. CNBC TV channel notes that, despite forecasts of continued availability of credit against the background of the UK exit from the EU, the current situation has a significant negative impact on the mood in the real estate market of the British capital.

An additional negative factor that could adversely affect the dynamics of prices in the British capital is the transfer of many of its employees from the UK to the EU against the background of the current political crisis due to the country's withdrawal from the EU.