Average London house price down by £30,000 in July, says Haart

London Terraces

The Brexit vote helped knock more than £30,000 off the price of an average property in London during July and has sent prices lower nationally, according to estate agent Haart.

The month-on-month decline is one of the biggest recorded by Haart, part of a group that includes the Spicer McColl, Felicity J Lord and Darlows brands.

In London, the average property price fell from £558,760 to £527,349, the equivalent of about a £1,000 drop every day last month.

Nationally, prices went down by 0.9%, Haart said, leaving the average UK house price at £233,254.

Rents have also begun to fall, although not by as much as house prices. Haart said the average rent across the UK dropped by 1% in July to £1,547 a month and 1% in London to £1,921.

Paul Smith, the chief executive of Haart, said house prices are still ahead over the year and transaction activity remains robust.

“We’ve actually seen a bounce in transactions in July, with a lot of buyers pressing ahead with their purchase now that the referendum is over. Sellers are cutting deals to bypass the uncertainty in the wider economy and plucky buyers are taking advantage,” he said.

The 0.25% cut in interest rates made by the Bank of England last week will help prices recover, Smith said. “While there is still some uncertainty, it won’t be long before the market bounces back. The only thing we have to fear post-Brexit is fear itself,” he added.

The Haart figures match Halifax data, which showed a 1% fall nationally in July, but are the first to show prices tumbling in the capital.

The impact of Brexit has been most dramatic in north and west London, Haart said. Postcodes stretching west from Mayfair through Hammersmith and Chiswick saw prices fall by an extraordinary 12.9% on the month alone, while in north London, prices plummeted by 9.3%, knocking £60,000 off the average home.

The figures are in line with some of the more dramatic forecasts made since the EU referendum on 23 June. Economists at Société Générale have said London prices could fall by 30% and halve in the most expensive boroughs. Foxtons and other estate agents have warned that business has slowed sharply since the Brexit vote.

The Royal Institution of Chartered Surveyors has predicted a slump in property transactions, with its members more gloomy about prospects than at any point since the late 1990s.

However, Halifax said month-on-month data is often unreliable and it prefers to rely on quarterly figures. Current growth rates appeared sturdy and there was not enough evidence of any post-referendum effect on house prices, it said.

The Halifax housing economist Martin Ellis said: “Overall, it remains too early to determine if there has been any impact on the housing market as a result of June’s EU referendum result.”

Falling activity in the lettings market could be a signal of what is happening in the underlying economy. Haart said the number of tenants entering the market fell by 8.3% in July and 4.3% annually, helping explain the decline in rents over the month.

Landlords are also retreating from the rental market, with the number of new landlords registering their properties down by 19% on the month and 46% annually. However, this is attributed to the increase in stamp duty on second homes and forthcoming tax changes to buy to let, rather than the Brexit vote alone.

Powered by Guardian.co.ukThis article was written by Patrick Collinson, for theguardian.com on Tuesday 9th August 2016 16.23 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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