London Housing in Deepest Slump Since the Financial CrisisBy
RICS index for the city drops to lowest level since 2009
U.K. housing ‘continues to lack impetus,’ sales stagnant
London’s housing market is in its worst slump since the depths of the financial crisis eight years ago, part of a broader slowdown that may continue.
The Royal Institution of Chartered Surveyors said its price balance for the city fell to the lowest since February 2009 last month. It declined to minus 49, indicating that a greater percentage of agents reported drops in March. Still, more respondents than not still expect prices in London to rise over the next year, the report showed.
According to Samuel Tombs at Pantheon Macroeconomics, the London measure tends to represent the prime market rather than the city as a whole. The slump in the gauge tallies with other reports of sellers in central London having to cut prices to close deals.
Nationally, the RICS price index stayed at 22 in March, though the expectations for both values and sales over the next year weakened. New buyer inquiries and sales were stagnant, with the most expensive properties among the worst performers, according to report.
In addition to buyers being kept out of the market because of high prices, nervousness about Brexit and the U.K. outlook are also weighing on demand. Any downside to prices may be limited because of the continued shortage in the supply of property to buy, with estate agents’ listings at a record low.
“High end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock,” said Simon Rubinsohn, RICS chief economist. “For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”
— With assistance by Mark Evans