London house prices are falling at the fastest pace since the depths of the recession almost a decade ago, with the capital’s most expensive areas seeing the biggest declines.
Average prices fell to £593,396 ($820,000) in January, an annual decline of 2.6 per cent, according to a report published by Acadata on Monday. That's the most since August 2009.
The city will be the weakest performing market in the country over the next five years, said Lucian Cook, head of residential research at broker Savills Plc, as a decade of soaring prices means London’s more exposed to political and economic uncertainty, the prospect of interest rate increases and mortgage loan limits.
Weakness in prime property in the UK capital in recent years – partly due to tax changes – is rippling out to other locations in the city and around the Southeast. London prices fell 0.8 per cent in January alone, according to Acadata, which publishes detailed regional data with a one-month lag. That shows the weakness that was present for much of last year continued into 2018.
Business has been slow in “a lot” of offices since the start of the year, though there are more deals being done in some central outlets, Simon Aldous, a director at Savills, said in a survey published last week by the Royal Institution of Chartered Surveyors. Offers for homes are often more than 10 per cent below asking prices, James Gubbins, a partner at Dauntons in Pimlico, said in the poll.
“Uncertainty over Brexit is the issue,” Gubbins said.
London’s highest-priced boroughs were the biggest losers over the last year, while the largest single drop was recorded in Wandsworth, down almost 15 per cent. The borough has seen a sharp surge in the number of expensive apartments being built there that Londoners don’t want or can’t afford.
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Read more:
UK's turbulent year draws to a close with little to cheer
UK launches post-Brexit industrial strategy
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Increased taxes on landlords and loan limits in Singapore have also helped to damp demand from overseas, leading to a record number of homes under construction in the UK capital that have yet to find a buyer.
Nationally, slower economic growth and faster inflation since the Brexit vote are weighing on the market, while the Bank of England is raising interest rates, adding to the downward pressure.
Media coverage of the slowdown, including headlines about falling house prices, is making consumers nervous and holding back demand. New buyers registering with real-estate agents fell for an 11th month in February, RICS said last week.
Hedge funds are again raising their shorts against home builders as sentiment changes. Firms including Millennium and Marshall Wace have increased wagers against companies such as Bovis Homes Group Plc, Taylor Wimpey Plc and Berkeley Group Holdings Plc in recent weeks.
Read more about hedge funds raising their short bets against home builders
The capital dragged down nationwide growth in February to 0.5 per cent. Even excluding London and the southeast, the 2.5 per cent annual rate of increase in January remained well short of the pace seen in recent years.
The housing slump may also be weighing on consumer spending, which fell for the ninth month in 10 in February, according to a separate report by Visa. Households spent the least on recreation since 2010.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
JOKE'S%20ON%20YOU
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
THE BIG THREE
NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m
ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m
RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m
UAE currency: the story behind the money in your pockets
COMPANY%20PROFILE
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
COMPANY%20PROFILE
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Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
MATCH INFO
Uefa Champions League, semi-final result:
Liverpool 4-0 Barcelona
Liverpool win 4-3 on aggregate
Champions Legaue final: June 1, Madrid
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
Pieces of Her
Stars: Toni Collette, Bella Heathcote, David Wenham, Omari Hardwick
Director: Minkie Spiro
Rating:2/5
COMPANY%20PROFILE%20
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Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh