London’s house prices won’t rebound until 2020, according to JLL
London's housing market won't recover from the hit of the referendum until 2020, property experts have predicted.
According to research by JLL, the UK housing market will be "more subdued" over the next few years, and London house prices will recover in 2020 "assuming Brexit negotiations are not too detrimental".
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There will be a slowdown in housing transactions and prices, the report said, as buyers will no longer feel pressured to "pay top dollar" for a new home. JLL also predicted that unemployment will rise in 2017, which will hit household spending.
However, any dramatic falls in prices will be cushioned by lower levels of construction.
Neil Chegwidden, director of JLL residential research, said: "Not only is London's economy more vulnerable to Brexit, but the housing market is also more reliant on investors, both domestic and international, and is hence more susceptible to buyer confidence.
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"While central and local government policies will be pro-development, we question whether they will really be able to outweigh the more cautious approach adopted by housebuilders in response to weaker market forces."
JLL said it expects the Bank of England to cut interest rates to 0.1 per cent later this year.
Recent research from Halifax and IHS Markit showed that London house prices fell by 2.5 per cent in the third quarter, which compared to a 0.5 per cent fall for the UK as a whole.
The drop in house prices can be in large part attributed to the stamp duty reforms of 2014, which have made prime central London properties more expensive. As a result, house prices in Chelsea have fallen by 10 per cent this year.