London house prices will drop 2% next year despite rising nationally, according to forecasts

LONDON — London house prices will drop 2% next year despite rising nationally.

Estate agents Savills forecasts that prices in Greater London will fall 1.5% over 2017 then fall by a further 2% in 2018, before stabilising in 2019 and returning to growth the year after.

Here are Savills’ five-year regional forecasts in full:

Screen Shot 2017 11 03 at 15.57.06

Here’s how that looks as a chart:

Screen Shot 2017 11 03 at 15.56.20

The slowdown — which is already starting to bite, with negative price growth measured in the third quarter this year — is being driven by bloated prices in the capital, slow progress in Brexit negotiations, and worries about further interest rate hikes from the Bank of England, which drive up mortgage costs.

Higher prices and stretched finances mean the market is more sensitive to issues like Brexit which can affect a change in sentiment.

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