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UK housing market 2018

By Patrick Higgins  |  15/01/2018 14:21
”Londonhouseprices”/
This article looks at the UK housing market and the recent price declines across London.

Housing prices in London are seeing their most significant fall since 2009, while the rest of the UK have seen prices increase. The average asking price in London so far this month has been around £600,000 - a decline of nearly 4%, in contrast to roughly £300,000 in the rest of Britain, which constitute increases of 4% or higher.  In addition to this month, overall prices in the capital fell by 0.5% in 2017. 
 
Homes out of reach
 
Despite the falls, home ownership in London remains out of reach for most, with primary mortgage loan repayments constituting more than 60% of average pay.  However, even outside the capital home ownership remains difficult for many with near-stagnant wage growth and an uncertain political climate.
 
Government intervention
 
The government has tried to address this, making moves towards more housing affordability such as Chancellor Hammond's decision in November to cut purchasing taxes on properties valued at 300,000 or below for first-time home buyers.  However, though this decision helped stretch first-time affordability across the rest of the UK, the average prices of London's housing market, while cooling down, are still far too high for this decision to make an impact.
 
Brexit blamed 

While the semi-abolition of the purchasing tax has provided some assurance to the UK-wide housing market in general, London is a unique case.  Bar the border with Northern Ireland, Brexit will most heavily impact London and its various industries, especially its financial market.  Though London has long been seen as a pillar of stability, the tumultuousness of the Brexit process has continually undercut that vision, with the most visual effects of said undercutting being the threatened transferring of significant bank operations and the Euro clearing houses from London to the Continent in the event of a hard Brexit.  These conditions of uncertainty can be characterised as significant factors in this month's fall of housing prices.  Therefore, the strength of London's housing market can be seen as profoundly leaning on how the Brexit process proceeds going forward. 
 

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