London, a regular on the world’s most expensive city list, is going through the doldrums. All in three parts:

  • New taxation rules that have seen Stamp duty increase while at the same time mortgage interest relief has been rescinded.
  • The notorious Brexit effect – whose effect is still unknown.

And finally - due to the nature of gifts/curses that makes them come in Threes -

  • A sudden increase in supply due to new construction and home owners selling 2nd homes because of reason number one.

And a Bonus brought to you by the Bank of England (BOE)

  • On August 02, 2018, the BOE raised interest rates for only the second time this decade which may depress prices further.

All this has worked to create a perfect storm that has caused the London housing market to contract. Since early 2017 a steady decline in property values in London has eroded the gains made across the UK as a whole.

While places like Manchester, Birmingham, Liverpool etc. have seen double digit growth in prices, over 42% of the postcodes in London have seen dips in their values ranging from 0.7% to 8% in Central London.


Source: https://blog.ons.gov.uk/2018/05/23/why-are-london-house-prices-falling/