London home sellers cut prices amid Brexit worry

LONDON • More home sellers in London are having to lower the asking price of their properties, and offering deeper discounts, as political uncertainty and high values dampen demand.

"Price cuts seen in prime central London in the immediate aftermath of Brexit are now filtering through," said Savills residential research director Lucian Cook. "Affordability issues are a problem after a decade of price growth."

London home prices have surged about 86 per cent since 2009, meaning it now costs buyers 14.2 times their annual gross salary to purchase a property, the highest level ever and more than double the rate for the United Kingdom as a whole.

As a result, the number of mortgages advanced to first-time buyers in London has dropped 12 per cent in the two years through September, data compiled by the Council of Mortgage Lenders shows.

The percentage of sellers cutting asking prices in January rose in all but two of London's 33 boroughs compared with July, the month after the UK voted to leave the European Union, according to data compiled by listings website Zoopla.

Meanwhile, home values in Sydney, Australia's largest city, rose at the fastest annual pace in 14 years in February as record low interest rates outweighed regulatory efforts to avert a housing bubble.

Average values in Sydney surged by 18.4 per cent, the biggest jump since December 2002, when Australia was at the tail-end of the early 2000s housing boom, according to data provider CoreLogic.

Despite tighter lending curbs to discourage speculative buying, the market shows few signs of easing amid strong economic growth, historically low borrowing costs and a tax system that offers perks for property investors.


A version of this article appeared in the print edition of The Straits Times on March 02, 2017, with the headline 'London home sellers cut prices amid Brexit worry'. Print Edition | Subscribe