Brexit uncertainty hits London property market the hardest in the UK, reports show

London remains a weak spot in the slowing UK housing market as Brexit clouds the outlook, reports on Monday showed.

The capital had an annual price decline of 0.2 per cent in May, property website Rightmove said on Monday. Separately, Acadata reported that in April London was the only region showing an annual fall, clocking in a 2.5 per cent drop.

Overall, national price growth stood at 1 per cent compared with a 9 per cent high reached in 2016, Acadata said.

Uncertainty surrounding Britain’s exit from the European Union has hit London the hardest. At the national level, years of rampant home-price inflation and a shortage of properties for sale have also pushed ownership out of reach for many would-be homeowners.

“London remains the exception, rather than the rule, when it comes to the strength of the market in the major cities of England and Wales, which remain strong,” said Oliver Blake, managing director of Your Move and Reeds Rains property agents. “The market remains slow, though, when it comes to the number of transactions.”

Rightmove’s report showed that uncertainty and stretched affordability led to “more hesitant buyers and sellers in some areas,” with London and its commuter belt seeing pronounced declines in the number of sales agreed by property agents. Nationally, sales so far this year are down 5.4 per cent on the same period a year ago, the report showed.

Home prices still grew 1.1 per cent in May from a year earlier, reaching a record high of £308,075 (US$415,000), Rightmove said, with seven out of 11 regions reaching their highest-ever asking prices.

A new tax on home sales introduced in Wales in April led buyers to bring forward purchases of high-value homes to avoid it. Out of all the regions surveyed, the top five annual price increases were in Wales, Acadata said.

“Different markets are still operating at different speeds, and the overall picture is one of a less buoyant market both in terms of price growth and number of sales agreed,” the Rightmove report said.