For the last decade, London was one of the hottest housing markets in the world.
That, however, could be coming to an end. Fears of Brexit becoming a reality caused many high end, luxury buyers to turn away from this market.
The result is severe downward presssure.
Price dropped over 12% due to the fact that almost half the homes built or under construction still have no buyer. Unless this situation turns quickly with more buyers stepping up, expect this pressure to grow.
Fears are that London might end up with empty luxury towers since this segment of the market is faring worse than the overall numbers. More than 1,900 luxury apartments built last year remain unsold.
While fears over Brexit is contributing to the downturn, there are other factors to consider.
The Chinese injected a ton of liquidity in the market by getting into the "flipping" game. Their goal was to buy units early in the construction process and flip the properties for a large profit upon completion. This is a sound approach when prices are on their way up. The recent reversal is causing people to try to cover in an effort to cut losses.
Another factor is the rising interest rates in the United States. This stems the attractiveness of the London market since the spread between yeilds is tightened. The U.S. Federal Reserve is taking the rate increase at a slow pace yet they are moving up. The difference from 2 years ago is signficant.
Last year, more than half of U.K. property purchases were international while London registered 1/3. With these buyers drying up for the reasons mentoined, this has weakened the market considerably.
Developers are caught trying to unload finished units at a serve discount. Sadly, for them, this does not seem to be working. They are offering all kinds of free incentives including carpeting, furniture, and even automobiles in an attempt to give incentive for buyers to purchase. The numbers reflect how little impact this strategy is having.
London is seeing the fastest decline in prices since the 2008 crash.
All is not gloomy. Other areas are seeing significant growth.
Interestingly, prices grew strongly in other parts of the country with east Midlands, East Anglia, Scotland and Yorkshire recording the fastest growth clips in housing prices at 7.3 percent, 7.2 percent, 6.7 percent and 6.1 percent, respectively.
This is worth watching. Is the global real estate market in peril due to the other factors mentioned or is this simply a case of Brexit affecting London. Over the last decade, Hong Kong, London, Toronto, San francisco, and New York City were some of the hottest markets on the planet.
Will London's issues bleed over to other cities?
To read more about this topic, follow this link.
https://safehaven.com/article/45840/Brexit-Is-Killing-Londons-Housing-Boom
The next 8 months are going to be interesting, I personally think a deal will be worked out that works for both sides and will limit the impact on London.
So ...more affordable housing for the rest of us..I don't see a problem with that... do you ?
Meanwhile in australia..
Affordable housing sounds good, could do with some of that in Dublin too :)
That is a market we can't withdraw from , we need shelter so we gotta pay rent ..that is our weakness that is being exploited.
We need to re invent the system that supplies new housing then, reverse engineer it somehow, perhaps by pooling millions of small investors like you and me.
Yeah i guess people are afraid that the prices in general. Including morgages and rents. But also taxes will for sure increase exponentially. Well it is a scary situation for us all.
love the lights!.. .. . this lively city
Wow looks like London is going to have the most recent housing market crash, before the U.S
You just rewrote the original article yet again like in your last post in trending -.-
If you keep doing this some whales will start to flag you sooner or later.
Look how community minded you are!!! Amazing! You've never made a comment in your life. This must be a new one, at least for me.
I usually don't say much when people buy their own trophies. But I think it's hilarious that you ask for input, yet you have never interacted with one single user.... EVER!!!
Don't forget @finprep - it's called Social Media, key operational word here is SOCIAL
Im starting to think if there is not one community vote in your top 20 voters you are abusing the bots.
Its bad enough we get rewards extorted from us, but when you got zero community votes, thats too much.
Have a good day.
look at you!!! awesome, this is a step in the right direction.
Congratulations @finprep!
Your post was mentioned in the Steemit Hit Parade in the following category:
Great Britain is a free country! I support the residents who voted to withdraw from the Euro zone of money. The pound is a good national currency. Why should the Englishmen feed lazy and stupid countries like Latvia ???
Lol
The problem will be for the common people ,The middle class who will get affected as the buisness and jobs would get clutched up because of this.Always this happens,the big tie suited people make the decisions that make common people bleed..
Brexit will not be profitable in the short term. Remember that the European Union has already died on several important issues. The GB was an important member and after brexit became a good partner for the USA. The Monroe doctrine is still alive. I do not expect it to be a huge loss for the UK in the long term. Other countries should follow in its footsteps and give an end to the European Union regulating everything and everyone. If you want to know the advantages of Brexit, read more on
http://www.polishexpress.co.uk/jakie-sa-dobre-strony-brexitu
I Love London 😍
Brexit will ruin the economy and slow the growth of the UK. For sure... its sad but it may seem that the UK is losing its global influence.
Nice post !
Upvoted and Resteemed!
-exp
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Great post!
Thanks for tasting the eden!
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Wow greate article!
Thanks for using the @postdoctor service!
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STOPTo support your work, I also upvoted your post!
this was suppose to happen after brexit, same thing happen in dubai, bro these decision not impact that country or economy buy somewhere down the line it affects other countries also .But Big Investors are very smart they take their profit and move to the next country where der is oppurtunity, let us become smart and play smartly on steemit and become successful together.
Upvote my commnets and reply
They said Brexit was bad and now here is the tragedy unfolding before our very eyes! Luxury towers sitting empty? My heart bleeds. I am sure every English man woman and child will feel the sting....not.
But it surely makes living in London cheaper, which is a good thing!
But it surely makes
Living in London cheaper,
Which is a good thing!
- dartelec
I'm a bot. I detect haiku.
@finprep you are great job please supporting me
I wish I can go there....
london is beautiful
Me parece injusto!
London Housing market in the end was anyway just a slavish abuse of unfamiliar foreigners
an analysis that attracts attention because it is delivered in a sharp and profound way that you are very mastered what you are discussing then I give 100% vote as an appreciation for your argumentative analysis. creative greetings and greetings
Good, london prices are fucking insane.
Brexit should be factored into the consideration. And quite frankly, Brexit will have its toll on London, the most.
That's correct. The brexit causes financial issues by the decrease of the investor trust, this situation looks poor if we add the tax reform that Trump proposed and the recent facts about the GDP growth that looks favorable for the USA economy,. The capitals return to other side of the Atlantic Ocean.
I believe this just a good one for them,there will be more to see and lot of changes
I liked your post, I have to learn something from your post. you do will be educational post everyday
Sehr guter und sorgfältig recherchierter Beitrag, weiter so
london is a nice city
I gave you an upvote on your post! Please give me a upvote(to this link https://steemit.com/@hammad97) & follow.
I will give you a follow in return and possible future votes!
One day I will visit UK.
Your idea bring the foreign investor in and indigence people out from the London. How many new homes been built? working class or labour class person can not even imagine to step into mortgage ladder. How much more to rise ? I hope new homes will be built and old homes prices will go down
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