Scottish independence could boost London property market

London's property market could benefit if Scotland votes for independence and some financial institutions decide to relocate to Britain, according to Rightmove.

London would be a "logical destination, creating extra employment and knock-on demand for homes", the property website operator said in its monthly house-price survey on Monday. The report showed asking prices for homes in the capital rose 0.9 per cent in September from August, ending three months of declines.

Royal Bank of Scotland Group and Lloyds Banking Group said last week that they plan to move their legal bases to England if Scotland votes for independence tomorrow. The latest polls show the referendum result is too close to call.

"Whilst it's all speculation at present, the drop-off in foreign-based buyers could be replaced in part by individuals and companies moving out of an independent Scotland," said Miles Shipside, a director at Rightmove. "Their funds and target price brackets may not be as high as those of overseas investors, but could they nevertheless put a further strain on the capital's limited housing supply?"

London's property market has shown signs of cooling in recent months and Rightmove said that average asking prices in the capital are now 5.9 per cent below their peak in May. The slowdown is partly related a surge in prices since early last year that stretched affordability. In addition, foreign buyers were hit with tax increases and a strengthening pound.

Rightmove also said that average asking prices for homes in England and Wales increased 0.9 per cent this month from last month and were up 7.9 per cent from a year earlier. In London, asking prices reached £557,792 (HK$7.03 million), more than double the British average, after rising 13 per cent over the past year.

On a national level, there is a risk that Scottish independence could unsettle consumers and disrupt the housing market, Rightmove said.