Property prices in the UK, especially in London, are dropping after the UK’s decision to leave the European Union and some owners, who are looking to sell, have decided to cut their asking price because of concerns about finding a buyer.
According to statistics from LondRes, a property research firm, the number of these cuts has increased by more than 150% in London over the first two weeks after the EU referendum. However, it would appear that these cuts and discounts have not prompted any significant action from buyers. The number of completions has dropped by 18% compared to last year nationwide and these numbers are even higher when it comes to London.
These numbers confirm that vendors are now more attuned to lower their asking prices in order to sell their homes. On the other hand, buyers are becoming very selective and they are trying to evaluate all aspects of the purchase in fine detail before they make a deal. Their basic goal is to make a purchase that will protect the value of their property in the near future and shield it from any further drops in price that may happen.
According to some agents, the real estate market in the United Kingdom has become very different than it was just a few weeks ago. Prices have dropped by 5-10% in some areas and there is a general atmosphere of uncertainty at the moment. Surveyors have confirmed that house sales have dropped in June and they expect an additional drop of about 25% in the next 90 days.
However, it’s not all doom and gloom. It looks like the outcome of the Brexit vote has increased the interest in foreign property investors. Estate agencies all over the UK have noticed increased interest from Spanish, Italian, Middle Eastern and Chinese investors after the UK referendum. Due to the decrease in sterling, many investors are now able to enjoy significant discounts on UK properties and enquiries have gone up since the Brexit vote.
It will be interesting to see how the housing market reacts when the negotiations on the split start in earnest.