House values in London will fall for the first time since 2009 next year on economic uncertainty resulting from the UK’s vote to leave the EU, according to estate agent Countrywide.
Price growth for homes in the capital will slow to 3.5% this year and drop by 1.2% in 2017, the UK’s largest real estate broker said in a report yesterday.
In December, Countrywide forecast that values would rise 4% this year and next.
Prices for properties in prime central London will drop by 6% this year and be little changed in 2017, the report showed.
“The vote to leave the European Union has unsettled the UK economy,” Countrywide chief economist Fionnuala Earley said.
Lower expectations of capital gains were already weighing on London’s housing market, she said, while the luxury-property market was being hurt by increased sales taxes and oversupply.
“The Brexit scare has just accelerated all of that,” she said.
London properties are taking longer to sell this month, despite a summer price cut, as uncertainty surrounding how Britain will negotiate its exit compounds the dampening effect of the holiday season.
Homes in London are staying on the market for five days more than in May, the month before the UK voted to leave the EU, property website Rightmove said in a report published last week.
Countrywide expects Greater London home values to rise 2% in 2018 as the economy improves and there is more clarity about how the UK will decouple from the EU, according to Ms Earley.
Countrywide forecast prime central home values will rise 4% in 2018.
By the beginning of that year, the firm expects prices in that market to have fallen 15% since the market’s peak in 2014.
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