Buy! Bye! BYE! Real Estate in the World's Most Expensive City
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- New taxation rules that have seen Stamp duty increase while at the same time mortgage interest relief has been rescinded.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.