SEVERE WX : Special Weather Statement View Alerts

London's property market is in a coma

London's housing market has ground to a halt.After years of blockbuster growth, ...

Posted: Apr 12, 2018 12:47 PM
Updated: Apr 12, 2018 12:47 PM

London's housing market has ground to a halt.

After years of blockbuster growth, home prices have reversed course and are expected to drop further over the next year. The number of sales has dropped, and more homeowners are pulling properties off the market.

The dour outlook comes courtesy of the Royal Institution of Chartered Surveyors (RICS), which warned in a report on Thursday that weakness in London had caused its UK house price indicator to hit a five-year low.

A number of factors have hobbled London's market.

The government has in recent years hiked taxes on property purchases, making it more expensive to buy luxury housing, second homes and investment properties. Doing so has scared off some wealthy investors and caused prices to slump in central London.

Britain's decision to leave the European Union has also hurt the market, with potential buyers putting their plans on hold because of the economic uncertainty.

One property professional surveyed by RICS said that Brexit and the tax changes had "killed the liquidity of the London market."

Related: Renting vs. Buying: What can you afford?

The Bank of England is also expected to keep slowly raising interest rates as the economy grinds forward, making mortgages even less affordable for Londoners.

The average house price in London is -486,000 ($690,000), according to the UK Land Registry.

That's too high for many first-time buyers, whose finances have been hit by high inflation and small salary rises. But sellers would rather pull properties off the market than accept lower bids.

"Buyers and sellers are currently locked in a stand-off," said Hansen Lu of Capital Economics.

RICS' chief economist Simon Rubinsohn said that the slowdown in London "has the potential to impact the wider economy, contributing to a softer trend in household spending."

He said the dynamic could ultimately impact the Bank of England's thinking about future interest rate rises.

Still, analysts don't expect house prices to collapse in London. Inflation has moderated in recent months, employment remains strong and the British economy is growing.

Lu said this should be considered "good news" for the stagnant market.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 448268

Reported Deaths: 6013
CountyCasesDeaths
Hennepin931011480
Ramsey40016739
Dakota33072340
Anoka30999364
Washington20164228
Stearns17871187
St. Louis13690241
Scott1195496
Wright11614104
Olmsted1048475
Sherburne821365
Carver694836
Clay653280
Rice606868
Kandiyohi554371
Blue Earth541033
Crow Wing482774
Otter Tail457167
Chisago452732
Benton420186
Winona389646
Douglas374166
Nobles370846
Mower365529
Goodhue347958
Polk328658
McLeod325345
Morrison311744
Beltrami310347
Lyon302236
Becker284939
Itasca284543
Isanti282841
Carlton280043
Steele27379
Pine266713
Freeborn245321
Todd231730
Nicollet224636
Brown215134
Mille Lacs214246
Le Sueur210015
Cass207623
Meeker199733
Waseca189316
Wabasha17083
Martin170026
Roseau165416
Hubbard149338
Redwood139727
Renville137539
Houston135913
Dodge13474
Chippewa131332
Cottonwood127218
Fillmore12355
Wadena120116
Rock110212
Sibley10857
Aitkin108433
Watonwan10668
Faribault105916
Pennington99215
Kanabec97818
Pipestone94423
Yellow Medicine93714
Murray8815
Jackson85610
Swift83418
Pope7385
Marshall70215
Stevens7018
Clearwater68514
Lac qui Parle65716
Lake63715
Wilkin6259
Koochiching59610
Lincoln4841
Big Stone4573
Unassigned43768
Grant4298
Norman4248
Mahnomen4107
Kittson37219
Red Lake3174
Traverse2503
Lake of the Woods1951
Cook1140

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 305606

Reported Deaths: 4278
CountyCasesDeaths
Polk45754449
Linn17795275
Scott15444163
Black Hawk13773236
Woodbury13016175
Johnson1211749
Dubuque11387150
Pottawattamie8992112
Dallas888671
Story869434
Webster469771
Cerro Gordo466768
Sioux455157
Clinton450361
Warren443938
Marshall427761
Buena Vista393429
Muscatine390477
Des Moines381841
Plymouth350368
Wapello344198
Jasper321959
Lee317130
Marion304952
Jones271349
Henry264330
Carroll255434
Bremer245048
Crawford231022
Boone218417
Washington217632
Benton209444
Mahaska193136
Jackson192031
Tama187757
Dickinson186026
Delaware173736
Kossuth173644
Clay168820
Wright164824
Fayette162322
Hamilton160029
Buchanan159923
Winneshiek155719
Harrison155162
Hardin154729
Cedar153219
Clayton151448
Butler148224
Page144715
Floyd139636
Cherokee139027
Mills136416
Lyon135332
Poweshiek132724
Hancock130224
Allamakee127928
Iowa125422
Calhoun12279
Grundy121226
Jefferson120724
Madison12039
Winnebago119429
Mitchell116234
Louisa115030
Cass113341
Chickasaw111612
Sac111215
Emmet110831
Appanoose110538
Union108822
Humboldt105519
Guthrie103024
Shelby102926
Franklin102418
Unassigned9310
Palo Alto9079
Montgomery85622
Keokuk85026
Howard84219
Monroe81218
Clarke7957
Pocahontas77611
Ida74630
Greene6927
Davis69121
Adair68820
Lucas6508
Monona64016
Osceola6409
Worth6113
Taylor5949
Fremont5126
Van Buren49712
Decatur4894
Ringgold4389
Audubon4158
Wayne41421
Adams2963
Rochester/St. Mary'S
Clear
34° wxIcon
Hi: 36° Lo: -1°
Feels Like: 23°
Mason City
Clear
38° wxIcon
Hi: 38° Lo: 1°
Feels Like: 27°
Albert Lea
Partly Cloudy
36° wxIcon
Hi: 37° Lo: 0°
Feels Like: 26°
Austin
Clear
36° wxIcon
Hi: 37° Lo: -1°
Feels Like: 25°
Charles City
Partly Cloudy
36° wxIcon
Hi: 37° Lo: 1°
Feels Like: 24°
A roller coaster of temperatures
KIMT Radar
KIMT Eye in the sky

Community Events