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London investment property prices are acting as an anchor on average UK property prices, holding back the average national increase.
The government’s official ONS house price index show a 2 per cent drop during February and a 3.8 per cent year-on-year drop as the capital’s buyers hold off until Brexit is solved.
London’s property prices across the board are acting as an anchor oe rest the country, with all types of properties experiencing reductions in value although apartments and maisonettes are hardest hit, down nearly 6 er cent year-on-year.
The Brexit effect has meant that houses that attract all types of buyer whether it’s cash, mortgaged, first time buyer or second stepper have reduced in value recently.
Meanwhile, the rest of the UK remains stable and most regions except Yorkshire and the Humber (-2.5 per cent) saw property prices rise during February by approximately 0.5 per cent.
John Goodall, CEO of Landbay, commented: ‘You don’t need to be a housing analyst to see that falling prices in London are acting like an anchor, dragging overall house price growth down across the country.
‘While issues with affordability and supply remain, political and economic uncertainty linked to Brexit is more acute than ever. The reality is we could have a combination of a new Prime Minister, a general election, a Labour government, or a second EU referendum in the coming months.
‘This means that while transactions volumes continue to tick over, the truth is we aren’t currently in a buyers nor a sellers market. Therefore, it’s understandable that many of those in a position to move are holding fire for now.
‘However there have been price rises in key areas outside of London, which backs up Landbay’s experience that landlords are casting their net much wider than the M25 when it comes to searching for new properties.’
However, the London anchor effect is having little impact on Wales where property prices have risen by 4.2 per cent year-on-year.
It is thought that the removal of tolls the Severn Bridge has helped to fuel a mini boom in Welsh property.
Haart CEO, Paul Smith, said: ‘Areas closest to the bridge such as Newport are reaping the biggest rewards. House prices here grew 9.5 per cent on the year, offering significant opportunities to buy to let investors looking to maximise on growth potential.’