Regardless of where you stand on the issue, there’s no denying that Brexit’s implementation is going disastrously. Authorities are in a mad dash to prep people for potential problems involving everything from medicine and toilet paper shortages to border-crossing backlogs. Now, new reporting suggests that housing prices in a handful of London’s tonier postal codes are also suffering through a Brexit tailspin.
But the news isn’t all bad. Calculations show that despite depressions in the capital, real estate markets in other regions are churning out double-digit growth percentages.
Brexit Chaos Hamstrings London Real Estate Growth
Sterling De Vere, a leading UK real estate agency, reported that housing prices in some key London neighborhoods, like Clapham, Balham and Putney, have collapsed by as much as 15 percent over the past year. Analysts have taken note because the region once served as the center of the country’s property boom. But now, according to recent studies, estate values in several parts of the city are dropping by the hundreds of thousands. For example, over the past 12 months:
- Wandsworth properties that once commanded £805,000 are now going for £685,000.
- Southwark homes that fetched £666,000 are currently running about £585,000.
- Islington rates have sunk to an average £684,000 from £750,000.
The downturn is particularly lousy news for places like Wandsworth and Southwark, which, in recent years, have welcomed high-profile speculative property development projects, like the Battersea Power Station where buyers plunked down £1 million or more for smaller flats. The development is in further financial danger because according to the Financial Times, people who scooped up swanky units in the refurbished buildings can soon rip up their agreements, reclaim their deposits and walk away from the project thanks to a construction-delay clause.
Your Move contends that the real estate pricing plunge represents “the steepest annual rate of decline in London prices since August 2009, during the last housing slump, which was itself associated with the banking credit crisis of 2008-09.”
In addition to London, home costs in the southeastern and northeastern parts of the country are also on the decline.
London Housing Prices Sink but Northwest Property Costs Soar
Sellers in parts of London may be suffering through a slump, but housing prices in northwest England are skyrocketing. Blackburn is currently clocking the country’s fastest real estate growth rate. Though the average cost of a London home is down by about three percent, properties in Blackburn have surged by about 16 percent on average.
Additionally, according to Your Move, Warrington is experiencing double-digit growth. Manchester prices are up by about four percent, and Merseyside sellers are enjoying an eight percent increase.
Brexit: The Current and Messy State of Affairs
Though ever-shifting, at the time of this writing, Brexit is in a state of limbo, and the uncertainty is wreaking havoc on several industries, including real estate. Both buyers and sellers are hesitant to make any substantial moves without seeing how the EU separation pans out.
In recent days, five million people have signed a petition that calls for canceling Brexit, and thousands of protestors staged a march over the matter. Parliament has twice defeated the prime minister’s transition plans, and Theresa May has vowed that she won’t bring the deal up for a third vote.
Some people say that May’s proposed procedures are so terrible that voting for them would be unconscionable. Other folks insist that the Brexit mess is a sorry example of political posturing gone dangerously awry.
Whichever the case, as Brexit continues to unfold, markets will continue to swerve as businesses and individuals position themselves to survive shifting financial realities. At this moment, however, bureaucratic conditions have stalled real estate growth in England and Wales. Even Halifax is beginning to experience a softening of about two percent, its lowest ebb in five years.