Average asking prices for newly marketed properties in the UK slumped by 2.3% in August 2018 according to the latest Rightmove house prices index. It was reduced by London and the South East. It is quite interesting because there is quite a change from July when Rightmove were quite optimistic but these are asking prices rather than selling prices. It is more an indicator of what people are asking for in terms of prices. Considering a lot of property gets withdrawn or is not sold so it needs to be put into context with other surveys. There will a bit of an upward bias but the numbers are more downwards than upwards but certainly with Rightmove the numbers tend to be more optimistic in terms of realistic prices as people are hoping for these figures rather than achieving them, consequently they are not a true reflection on realistic selling prices.

 

Rightmove tracks the movement and trends for asking prices and if you take London and South East out of the equation the figures are a lot better for the rest of the country. This illustrates affordability issues are hurting buyers in the capital; and outside of London it is in a better position where affordability is better and consequently more activity.

 

In terms of prices in the city including Kensington & Chelsea they have been more affected by stamp duty change in December 2014 although at the time the government and a lot of commentators felt that it affected just the top end of the market. But what has happened is that affect has then trickled down to the rest of London. Although prices have definitely softened in the city of London, there is no doubt that the whole city then becomes impacted from the issues and becomes a chain affect. With regards to what is driving it there are many factors of this fluctuation such as Brexit which is a large one, because it adds that indecision or lacking of confidence in the market for taking on debt and with prices risen so far and so fast up to the referendum in anticipation of a more positive result one way or the other it has made a difference to the decisiveness of investors.

 

In relation to foreign investors in the UK market it has changed as activity from foreign investors is driven by the activity of the domestic market as well as the value of the pound and foreign investors weigh up as to whether London is a valuable market compared to maybe perhaps other parts of Europe in terms of a place to invest.

Certainly the government have tried to put burden on investors as they have realised that profits have been quite high and they have increased the taxes which has had another affect on reducing activity, prices and the market in London has been softer than it has been previously.

 

The sell off in sterling has helped increase demand from abroad and has assisted to an extent with regards to investors investing in London but has held off partly because of the Brexit uncertainty. However as you all know a number of foreign investors have started to invest in Manchester, Birmingham and Liverpool. So a number of investors are shifting their attention to up north!

 

Best of Luck!