The rapidly cooling London property market ground to a complete halt in the run-up to the EU referendum and has started to slide since last month’s shock vote for Brexit, two surveys suggest today.
Fears over the outcome of the poll on EU membership — combined with the impact of stamp duty hikes on more expensive homes — left the market stagnating on zero growth during the spring quarter, according to the respected Halifax House Price Index.
Chris Williamson, chief economist at financial data company Markit, which compiles the index for Halifax, said: “This is the first time prices have failed to rise in London since late 2012.”
He added: “Some of the heat therefore seems to have gone out of the housing market. However, the extent to which this is a reflection of Brexit worries or the increase in stamp duty in the Budget remains uncertain.”
However, a second piece of research — one of the first published since the poll — pointed to the surprise result tipping the London property market into reverse, with asking prices down 1.1 per cent over the past month.
It means that the Brexit result has already cost the average London homeowner £6,000, according to the latest Asking Price Index compiled by property search website Home.co.uk.
The 1.1 per cent monthly fall was the biggest for any region in Britain and leaves average asking prices in London standing at £544,461.
Doug Shephard, director of Home.co.uk said: “It is too early to fully appreciate the Brexit fallout for the UK property market but the initial indications are certainly worrying.”
He added: “Until last month the property market had been functioning well and was helping to shore up the fragile UK economy. Brexit just knocked off one of the wheels.”
The two surveys confirm growing anecdotal evidence from agents that buyers are refusing to pay “overvalued” pre-Brexit prices.
Any signs that the property market in London is starting to slump will delight the first-time buyers who have struggled to gain a toehold on the property ladder since prices began to boom in 2009 after the financial crash.
Research carried out by the Standard last week suggests there has been a surge in the number of sellers cutting the price of their properties over recent weeks