Falling house prices forecast: what do they mean for London property?

In wake of the Brexit vote, many experts have been publishing market reports and forecasts for the year ahead, with the likes of Knight Frank, Countrywide and Halifax, all indicating a fall in house prices. Lower prices tend to breed uncertainty among buyers, however, they can in fact be an excellent opportunity to access greater lending and receive more return from your investment.

Although many anticipated Brexit would have a negative effect on the market and economy as a whole, the market is currently showing no signs of recession, with a slight drop in figures simply reflecting the seasonal lull we would expect at this time of year.

Overall, the market is still liquid, with a large amount of uncertainty down to negative press and rumour. Mortgage deals are lucrative with some of the lowest rates on record being released, which show no sign of slowing.

Has Brexit affected house prices?

Halifax has stated prices fell between June and July, while Rightmove claimed asking prices in London fell by 2.6% over the past month. 70% of London postcodes have supposedly seen reduced asking prices compared to just 30% increasing. Countrywide also forecast a 1% fall in house prices next year, expecting growth to slow until a 2% recovery in 2018.

Yet, these figures have all been released during a notoriously quiet time and are based on the company’s own data and estimates, without taking every significant factor into account. Aside from Brexit, how will the buy to let tax changes impact the market? Having published a consultation paper on new minimum underwriting standards for buy to lets in March 2016, the results from the Prudential Regulation Authority are due in September and set to further change rental calculations, making the market increasingly challenging for landlords.

House prices are generally based on confidence, so with any ounce of uncertainty from buyers, demand will drop and prices will follow. However, it is far too early for any reports to be twinned with Brexit. Prices will naturally fall in August as the majority choose jetting off on holiday over buying a house – so it will be a few months before we know the real fallout from Brexit, if any.

The future of the property market

Essentially now is a fantastic time to borrow, especially for the buy to let sector, which is soon to be rocked by changes from the PRA. Gross mortgage lending remained 6% higher in July on an annual basis (according to the British Bankers Association), so there is still a positive feeling in themarket all-round.

Although rising inflation and the weakening pound may result in a rate rise in the future, lenders are extremely keen to lend, especially for those with access to equity. We at Enness are still experiencing significant enquiries as a result, despite August usually being a predictably quiet month. We would encourage any client seeking finance to do so now while some of the best offers on record are available.

If you’re unsure how to tackle the current market, we are here to reassure you and answer any questions you may have. Our expert advisers are on hand anytime to help – no matter how complex your circumstances are.

News post by:

Islay Robinson


Enness Private

We arrange large mortgages secured against international property for global individuals.

You May Also Enjoy

Who are Rentd
Letting Agent Talk

Renters (Reform) Bill Dropped – Thoughts from the Industry

The Renters (Reform) Bill has been dropped as a result of the general election being called. Here are some thoughts from within the property industry. Ben Beadle, Chief Executive of the National Residential Landlords Association: “It is hugely disappointing that this Bill will not now make it into law. The news comes despite the fact that…
Read More
Estate Agent Talk

July 4 General Election – Thoughts from the Industry

Prime Minister, Rishi Sunak has called a general election for July 4, 2024, citing now being the time for the people of Britain to choose the next government. Here are some thoughts from within the property industry. Tim Bannister, Rightmove’s property expert: “A look back at recent elections shows that house prices and activity usually…
Read More
Rightmove logo
Breaking News

Rightmove’s weekly mortgage tracker

Matt Smith, Rightmove’s mortgage expert said: “Today’s inflation drop feels like an important milestone on the road to the first Base Rate cut. There’s been some to-ing and fro-ing over whether we’ll see a summer Base Rate cut, but today’s news will likely reinforce some of the positive words coming from the Bank of England…
Read More
Estate Agent Talk

Rayner right to be ambitious on housebuilding

At UKREiiF, Angela Rayner, Shadow Housing Secretary made several commitments to help solve the UK’s housing crisis including new towns, greater numbers of affordable housing, a return of housing targets and a clear design code criteria. Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said: “Although election season is the time for…
Read More
Breaking News

Comment on Land Registry’s House Price Index showing an annual rise of 1.8%

Commenting on Land Registry’s UK House Price Index showing an annual rise of 1.8%, Daniel Austin, CEO and co-founder at ASK Partners, said: “The property sector is recovering. Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential. In the realm of commercial real estate,…
Read More
Breaking News

Breaking Property News – 22/05/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Sunak calls General election for 4th July 2024 – American Independece Day Many pundits feel that post the General election Rishi Sunak will fly off to Silicon Valley, so maybe holding the General election on American Independence Day is no coincidence! The real carnage…
Read More