Garry Knight via flickr
The average asking price in the city fell 1.5% to 636,777 pounds ($ 813 thousand) this month compared to the previous year, which is the largest annual decline since May 2009, Rightmove Plc reports. Within a month, prices in London fell by 2%.
The housing market in London showed growth below the market level compared to the rest of the country since the beginning of 2016, after demand suffered from the results of the Brexit vote and higher taxes for investors. The more expensive houses are suffering the most, since London’s inner regions have experienced an annual decline of 4.2%, while prices in cheaper suburbs grew by 1.7%.
"There is a spring surge in the rest of the country; in most regions there is a price boom and new price records, yet some parts of the London market are still adjusting," said Rightmove’s director Miles Shipside. "The higher the discretionary upper market, the more it is necessary to seduce buyers with cheaper prices, compensating for higher taxes on the purchase".
For the United Kingdom as a whole, prices rose by 1.1% in April, Rightmove reported. Growth was slower than the average monthly growth of 1.6%, observed at this time of the year for the past seven years. And the annual growth of 2.2% was the weakest since April 2013.
The loss of momentum can signal that buyers are becoming more cautious, as the acceleration of inflation undermines real incomes, and the beginning of a formal process for securing entry from the EU is obscuring economic prospects.
On the other hand, the share of foreign investment in real estate in Britain at the same time showed growth. At the end of 2016, JLL consultants estimated this indicator at 51%, and the figure was 48% in 2015. Investors from South and North America weakened their activity, and share of their capital in the total volume of foreign investments in real estate fell from 32% in 2015 to 17% in 2016. The share of transactions with Asian investors in the same period, on the contrary, increased from 17% to 28%, European (excluding Great Britain) - from 14% to 23%. According to JLL, the activity of foreign investors will continue to grow by the end of 2017. Already, consultants have noticed an increase in the interest of buyers from the countries of the Middle East and the Asia-Pacific region.
Other consultants also noted the growing interest of foreign buyers in various properties in the UK. So, according to Knight Frank, number of applications for buying premium real estate in London from the Russians has tripled in January 2017. The consultants attributed this to the return to the market of deferred demand against the backdrop of economic and political uncertainty associated with the referendum on Brexit.
The growing demand for residential real estate in the UK has already become the reason for price stabilization in the premium segment. According to Savills, in the first quarter of this year, the average cost of such housing was £ 2 million, down by 0.3% compared to the same period last year. In the fourth quarter, the fall in prices was estimated at 2.2%, following the results of 2016 - in 6.9%.
source: bloomberg.com
The housing market in London showed growth below the market level compared to the rest of the country since the beginning of 2016, after demand suffered from the results of the Brexit vote and higher taxes for investors. The more expensive houses are suffering the most, since London’s inner regions have experienced an annual decline of 4.2%, while prices in cheaper suburbs grew by 1.7%.
"There is a spring surge in the rest of the country; in most regions there is a price boom and new price records, yet some parts of the London market are still adjusting," said Rightmove’s director Miles Shipside. "The higher the discretionary upper market, the more it is necessary to seduce buyers with cheaper prices, compensating for higher taxes on the purchase".
For the United Kingdom as a whole, prices rose by 1.1% in April, Rightmove reported. Growth was slower than the average monthly growth of 1.6%, observed at this time of the year for the past seven years. And the annual growth of 2.2% was the weakest since April 2013.
The loss of momentum can signal that buyers are becoming more cautious, as the acceleration of inflation undermines real incomes, and the beginning of a formal process for securing entry from the EU is obscuring economic prospects.
On the other hand, the share of foreign investment in real estate in Britain at the same time showed growth. At the end of 2016, JLL consultants estimated this indicator at 51%, and the figure was 48% in 2015. Investors from South and North America weakened their activity, and share of their capital in the total volume of foreign investments in real estate fell from 32% in 2015 to 17% in 2016. The share of transactions with Asian investors in the same period, on the contrary, increased from 17% to 28%, European (excluding Great Britain) - from 14% to 23%. According to JLL, the activity of foreign investors will continue to grow by the end of 2017. Already, consultants have noticed an increase in the interest of buyers from the countries of the Middle East and the Asia-Pacific region.
Other consultants also noted the growing interest of foreign buyers in various properties in the UK. So, according to Knight Frank, number of applications for buying premium real estate in London from the Russians has tripled in January 2017. The consultants attributed this to the return to the market of deferred demand against the backdrop of economic and political uncertainty associated with the referendum on Brexit.
The growing demand for residential real estate in the UK has already become the reason for price stabilization in the premium segment. According to Savills, in the first quarter of this year, the average cost of such housing was £ 2 million, down by 0.3% compared to the same period last year. In the fourth quarter, the fall in prices was estimated at 2.2%, following the results of 2016 - in 6.9%.
source: bloomberg.com
