Jersey holds steady as London cuts prices20/03/17
London has been making the running in UK property prices since the start of the millennium. Even during the 'credit crunch' of 2008 and subsequent recession, the UK's capital continued to defy the economic forces that were being felt in the rest of the country.
The Brexit effect
That said, the latest figures coming out of the UK suggest that Brexit is having a far greater effect on property values in London than the recession ever did. It seems that buyers may have placed more value on the city's access to Europe than many Brexiteers predicted.
This article from Bloomberg, shows that the number of vendors cutting their prices has increased dramatically in all but two London boroughs.
Islington and Hackney are the worst affected boroughs, with reductions to the original asking price now averaging about 15%. This is on top of the two boroughs having about twice as many reduced-price properties (chart 1) in January this year than they did in July 2016.
Of course, Brexit is going to be a long road and these figures only give us a snapshot of recent history, so they don't necessarily help us make long-term predictions. However, they do suggest that in the short-term at least, London's property market is going to deviate from its recent history of rises.
Against this volatility in the UK, Jersey's house prices remain strong and steady. As we've discussed in previous posts, local prices are rising by 4% on average. This is a sustainable rate and, with the island not being directly subject to Brexit, both owner-occupiers and landlords will be grateful to be operating in a much calmer market.