LONDON — A growing number of home sellers across London are slashing asking prices for houses as the capital’s bloated market shows further signs of stalling.
According to online estate agent Zoopla, the percentage of sellers who cut asking prices had grown in all but two of London’s 33 boroughs in January this year compared with July 2016.
That indicates weakening demand and issues with affordability in a market where the average house currently costs an eye-watering £486,000, compared to the national average of £205,800.
Take a look at the chart below, which uses Zoopla data provided to Business Insider and originally compiled for a Bloomberg report:
It shows that the only two boroughs in the whole capital which bucked the trend — and saw the percentage of reduced listings shrink — were Barking & Dagenham and Redbridge.
Everywhere else, the number of reduced listings grew, with the average level of price reductions in January ranging between 4% and 8.2% across boroughs. Price cuts were the biggest in expensive “prime” central areas like Kensington and Westminster, falling by an average 8.2% and 7.8% respectively.
While central London’s “prime” property market has taken a significant hit since last June’s Brexit vote, more affordable boroughs in outer London remained resilient and continued to grow, albeit at a slower rate — but problems with selling appear to be growing across the whole capital.
So what’s happening? The first is simply the issue of affordability in a market where a typical house costs 14.2x the average London salary — over double the average for the UK as a whole.
Economic uncertainty surrounding Brexit is also having a big impact, and so are stamp duty changes introduced last year which have made it more expensive to buy a home in the capital. A note from analysts Hometrack says that the London slowdown is “a
There are other worrying signs in the market for sellers this year, too. London registered its lowest rate of growth for 42 months in January, according to Hometrack, and Zoopla’s data adds to a growing consensus that London’s property boom could finally grind to a halt in 2017 after decades of runaway growth.