- London’s housing market is set for another turgid year.
- Prices in the capital remain firmly in negative territory, according to RICS.
LONDON – London’s housing market is set for another turgid year.
A January survey by the Royal Institute of Chartered Surveyors showed house prices in the capital remain firmly in negative territory, with considerably more respondents to the survey reporting falling prices than rising prices.
Here’s how it breaks down regionally:
The outlook isn’t much better. While prices are expected to flatline nationally in the next three months, London is once again the exception, with most respondents expecting prices to fall – although the net balance ticked up from -41% in December to -21%.
The poor outlook for house prices in the capital reflects other mainstream forecasts.
Estate agents Savills forecasts that prices in Greater London will fall 1.5% over 2017 then fall by a further 2% in 2018, before stabilising in 2019 and returning to growth the year after.
The London slowdown – which is already starting to bite, with Nationwide measuring negative price growth in the third quarter this year – is being driven by bloated prices in the capital, slow progress in Brexit negotiations, and worries about further interest rate hikes from the Bank of England, which drive up mortgage costs.
“Divergent regional trends remain very much to the fore,” said RICS chief economist Simon Rubinsohn.
“Affordability issues continue to play a key role in explaining this pattern with those areas where house price earnings are most stretched seeing the softest markets.”