22nd June 2016
Eurozone buyers are piling into the London property market as prices wobble in the face of EU Referendum uncertainty. House prices have fallen €33,200, according to new analysis from London Estate Agents Stirling Ackroyd.
The depreciation in sterling in June means the average price of a house in London equates to just €596,900 – compared to a record high of €630,100 in November 2015. This change means homes in London have become 33,200 cheaper to Euro buyers, a fall equivalent to £26,000.
This €33,200 saving amounts to a 5.3% discount within London’s residential market.
Andrew Bridges, managing director of Stirling Ackroyd, says: “European buyers are snapping up bargains across London. A declining exchange rate has meant London is becoming a more affordable global property hotspot – particularly for those paying in Euros.
“If Britain votes to leave the EU, Sterling is set to fall further so, ironically, London would become even more affordable – and therefore more attractive – to overseas buyers paying in Euros. While Eurozone buyers are propping up the temporarily soft market as prices stutter, Brexit might make Europeans much more significant players in London’s property scene.
Unease for sterling buyers
In sterling terms, London house prices are still historically high but this masks some underlying cooling in the luxury end of the market.
The latest research from Stirling Ackroyd reveals that the top 25% of London’s market saw an annualised fall of 2.4% within the last quarter of 2015, in stark contrast to the 8.2% annualised growth the majority of neighbourhoods experienced. [i]
London’s most luxurious West End areas are being hit particularly hard by the referendum. Kensington High Street (W8) witnessed the highest annualised quarter-on-quarter fall of -11.8% across the last quarter of 2015. This was accompanied by a -10% fall in Notting Hill (W11).
Andrew Bridges says: “After the referendum chatter has calmed down the bright lights of London will be undimmed – whatever the result. London’s resilience is second to none.
“House prices may be cooling slightly in the face of geopolitical uncertainty – but this is offering bullish buyers opportunities. The luxury areas of London’s property market are feeling the acutest drops in house prices but these areas typically have a higher proportion of European buyers – meaning exchange rate discounts on property purchases are compensating for any further slowdown.
“Speculation about the aftermath of the result is rife, but London’s reputation as a valuable property investment hotspot remains undiminished. The capital is fully equipped to combat the consequences of either a Remain or a Brexit vote, and London will continue to attract an abundance of potential buyers and retain its global capital city status. A ballot paper may prove an unequal opponent to London’s property power.”