Property Reverse

The Brexit effect takes hold on the London Real Estate market.


London property prices have taken a nose dive at a pace not seen since the late 2008 recession. The investment community now view prime residential properties in London as trading at a discount, a decrease of around 20% since 2014 highs. 

With the effect of the plunging pound aggravated but the Brexit fall out, the price index of £2m+ properties is down 24% from the 2014 peak when marked against in USD, decreasing 17% in 2016-17.

The volatility currently experienced in the London property market has dispelled the myth that the only way is up for the blue chip property market is ‘up’. 

At the super prime end of the market, where homes sell for £20m+, prices have decreased 25% when benchmarked in British pounds. 

Up until late, the London property market has been a very robust asset class and has featured as a large component part of the investment portfolio of the International high net worth community, and with sound reason, as over the past 30 years London property prices have experienced a 50 fold increase, which in comparison to the Dow Jones it outpaced it by 100% over the last 4 decades. 

But the UK’s looming break away from the EU, along with political instability, new taxes on transactions, and astronomically high London real estate prices have sent the market in to reverse. 

There remains a lot of international money invested in London property. However, with the market now in reverse, twinned with Brexit worries, this motivates investors to sell, that would drive the market still lower, time will tell whether the price free-fall that we are currently experiencing is a correction of sorts, or something more long-term and worrying.

Sven Andersson