- Reuters/Toby Melville
- Big cities on both sides of the Atlantic are witnessing worrying signs in their property markets as prices for both renting and buying fall.
- In London, the balance of prices is now -47%, meaning that almost half of property surveyors expect a fall in value.
- While in New York, rents fell their most in almost seven years in March, signalling weakening prices in the American financial hub.
LONDON – The previously runaway property markets of some of the world’s largest financial centres are slowing down rapidly.
On Thursday new data from the Royal Institute for Chartered Surveyors (RICS) showed that the London property market continues to stutter, with one figure in property industry saying that the data shows that recent developments have “killed the fluidity of the London market.”
RICS reported that the balance of prices – a measure obtained by comparing how many chartered surveyors see prices falling to how many see prices rising in the near future – was broadly flat across the whole of the UK, but showed a significant negative balance in London.
“London exhibits the weakest feedback, with a net balance of -47% of respondents citing further price declines,” RICS said in a release.
“The latest Rics results provide little encouragement that the drop in housing market activity is likely to be reversed any time soon. It has the potential to impact the wider economy contributing to a softer trend in household spending,” Simon Rubinsohn, RICS’ chief economist added in a statement.
London property is being impacted by two main factors – last year’s changes to stamp duty rules and the uncertainty surrounding Brexit.
“Stamp duty and Brexit have killed the fluidity of the London market. Only when the extent of the resulting economic damage is properly understood will things be able to change for the better,” Toby Whittome, an estate agent with Jackson Stops said, according to the Guardian newspaper.
Falling activity in London is nothing new. Late in March a widely respected survey from Nationwide building society showed that prices in the capital fell by 1% year-on-year in the previous quarter, and that the London market is being blighted by “an ever more widespread frost.”
That added to evidence of falling prices from estate agent Savills, which reported earlier in the year that it is seeing price declines of as much as 4% in residential areas of South West London such as Battersea, Clapham, Wandsworth, Fulham, and Richmond.
RICS’ data for London follows on from news that rents in the New York borough of Manhattan fell by their most in almost seven years in March, signalling weakening prices in the American city.
In March, Manhattan’s median rent including such discounts fell year-on-year by the most in six and a half years, according to a monthly report released Thursday by Douglas Elliman Real Estate.
“It’s a great renter’s market if you’re looking for an apartment,”Hal Gavzie, the executive manager of leasing at Douglas Elliman told Business Insider’s Akin Oyedele.
“It’s a fantastic time to be looking because you do have so many choices and there are still quite a bit of concessions available.”