The BBC reports the estate agent has been forced to close six offices in the past year, with its remaining 61 able to cover around 85% of London.
Beyond Brexit, rises in stamp duty have also seen more people choosing to stay put rather than move.
This “wait-and-see” approach has been replicated across the country.
According to Nationwide's latest house price index, house price growth in the UK remained sluggish in February, with prices just 0.4% higher than the same time last year,
“While this is an improvement on the 0.1% growth in January, prices had been rising by around 2% last year” notes The Daily Telegraph.
Robert Gardner, Nationwide's chief economist, said the subdued activity in the housing market was due to weakened consumer confidence in the face of political and economic uncertainty as Britain prepares to leave the EU.
“While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months” he said.
Jonathan Samuels, chief executive of property lender Octane Capital, was more downbeat, claiming that despite a strong employment rate, low borrowing rates and below-target inflation, buyer sentiment had been “shattered” and the property market was “on its knees”.
In the short-term, Lucy Pendleton, founder director of independent estate agents James Pendleton, warned City A.M. the current uncertainty clouding the market will be the norm until after the UK leaves the EU on 29 March.
Looking past Brexit, Pendleton said: “The market is falling in real terms but in the more expensive parts of the country, particularly London, it’s going to take a more significant retreat in prices to pull first-time buyers to the table in significantly greater numbers.”
Samuels suggests the impact of flatlining house prices could be indicative of a wider trend among house buyers.
“The home ownership rate may have improved but the relationship many people have with bricks and mortar is changing irreversibly” he said, warming “March could be the month the property market finally succumbs to madness.”
Foreign buyers tempted back by weak pound
20 February
Foreign buyers are being tempted back to the London housing market, as flatlining prices and a weaker pound make property in the capital too attractive to resist.
According to Rightmove’s latest house price report, the average asking price for a London home rose by 3.4% from January to February to £614,000.
Homes & Property says this was in part due to a seasonal uplift in new sellers “as people start to put their homes on the market as the spring selling season approaches”, but also an “influx of international buyers returning to the capital as the temptation of the weak pound overrides Brexit uncertainty”.
Hamptons International research found foreign investors bought 57% of homes in central London locations in the second half of 2018, and now account for a higher proportion of prime property buyers than they have in the past six years.
Renewed interest from abroad has driven the price bump in inner London boroughs such as Camden and Westminster, where asking prices rose more than 5% in February.
“The shift away from UK purchases continues the trend of rising demand from foreign buyers since the 2016 EU referendum, before which international customers bought only 40% of homes,” says City A.M.
Aneisha Beveridge, head of research at Hamptons, said: “Sterling’s weakness, making it cheaper for many international buyers, seems to be outweighing Brexit uncertainty when it comes to foreign buyers making a decision on where to buy a home.
“A property that would have cost an EU buyer £1m in the first half of 2016 effectively cost £124,000 less in the second half of 2018 due to sterling’s depreciation.”
A breakdown of Hamptons data has revealed that a growing proportion of these buyers came from Europe last year. EU buyers made up 19% of central London purchasers, regaining their position as the largest foreign group. By contrast, the proportion of Middle Eastern buyers in the area has nearly halved, falling from 15% in 2017 to 8% last year.
London’s housing market is expected to experience a slight “pull-back” next year, as house prices across the UK stagnate, according to Britain’s surveyors and valuers.
The Royal Institution of Chartered Surveyors (Rics) predicts that the number of house sales will fall to around 1.15 million, a drop of 5% compared with 2018 and sharply below the 1.7 million that changed hands in 2006, the year before the financial crisis.
Prices are also expected to flatline nationally, as London and the south-east experience a slight drop and Northern Ireland, the north-west, Scotland and Wales maintain “solid momentum”.
The surveyors body said that, while Brexit uncertainty is a significant factor, the key issue was that the ceiling for affordability has been reached in much of the south.
“House prices are now a greater multiple of earnings than at any point since records began,” said Rics. “Such high house prices are shutting more and more people from accessing the market and forcing others to save longer for a deposit.
“Even for those who could in theory afford to buy, current prices may still be off-putting. Unfortunately, there is little reason to anticipate a material improvement in affordability next year either.”
However, Rics dismissed as “implausible” the Bank of England’s warning that a disorderly no-deal Brexit could see property prices crash by up to 30%.
The Guardian says “one reason why house prices are unlikely to crash is the continued paucity of supply and few forced sellers”.
“Sellers are thin on the ground, limiting choice for buyers and the likelihood of a price crash,” says the newspaper.
This is supported by new figures from housing website Rightmove, which reveal that asking prices in the capital fell £11,275 to an average of £602,996 last month.
While this 1.8% seasonal slip actually marks the smallest November to December decline for five years, “it's not a sign of an improving outlook but rather a dramatic reduction of properties available to buy”, says Homes and Property.
According to Rightmove, the number of homes being listed for sale has plummeted by 19% compared to this time last year, which has helped to fuel the comparatively low five-year drop in asking prices.
“Wannabe buyers are therefore left with slim pickings to choose from and vendors are holding back as their homes appear to get cheaper,” says Homes and Property.
Sellers in inner London and the capital’s most central boroughs seem most hesitant, with a 24% drop in new listings compared to a 16% decrease in outer London.
This is likely due to the fact that a large contingent of affluent homeowners in the capital’s most expensive enclaves do not need to move house and are waiting for a recovery in prices before selling.
