London property market still affected by Brexit but set to revive from 2020

Brexit continues to dominate the London property market with annual price growth across the capital at its lowest level since 2009, according to the latest residential market outlook report.

Resilient buyers sought to close deals across London before the original 29 March deadline for the UK leaving the European Union, and others are watching and waiting for more clarity and certainty that still appears elusive.

The report from Cluttons also reveals that price negotiation remains a significant factor and properties are selling for an average 11.5% discount on their asking price whiles sales are down 4.3% year on year.

It also says that the current supply demand imbalance points to an uplift in rental prices in coming months and annual rental price growth is at its strongest in 16 months.

For the central London market, Cluttons anticipate a 3% fall in values over the course of the year but confidence set to return once the uncertainty surrounding Brexit recedes. Looking further ahead, Cluttons expects the London revive after 2019 and outperform the UK during 2020 to 2022.

Cluttons also predicts that rental price growth will outperform sales across central London in each of the next four years with cumulative growth of 7.6% over that period.

James Hyman, head of residential at Cluttons, said:

‘We are beginning to see more activity out there but only at the right price. Sellers who are prepared to price their properties sensibly will get offers. For example, we marketed three properties last week at 15% to 20% lower than the original price and within 48 hours we had multiple offers.

‘There has been a lot of discussion about the recovery of the London property market once there’s a resolution to Brexit. This simply won’t be the case. There’s effectively three years’ worth of people who haven’t put their house on the market, creating a Brexit bottleneck which will lead to a sharp correction when they do.

‘If people are serious about selling, they should market their properties now to beat the rush of supply. However, they do need to be realistic about the price as nothing has changed in terms of affordability. Buyers haven’t suddenly got bigger salaries and they still must contend with tighter lending criteria.’

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