How Brexit is affecting London house prices: recent Commons vote means no end to the political uncertainty deterring buyers

Thousands of pounds was knocked off the asking price of the average London house between February and March — the first drop at this time of year since 2015 — as Brexit-led economic and political uncertainty continues to build.

The average price tag of homes being put on the market in the capital slid by £6,625 this month — down 1.1 per cent from February.

Typically the property market picks up as winter turns to spring. But this month the number of sales agreed by agents was 9.6 per cent lower than 12 months earlier.

“Politicians have to realise the continued uncertainty of Brexit will have greater consequences. Extending the deadline, to June or indeed four years cannot be a satisfactory solution for the property market,” warned Marcus Bradbury-Ross of The London Resolution.

Prices in prime central London continue to be cut with the average asking price being lowered by 2.9 per cent from February to March and up 0.7 per cent in the more affordable outer reaches of the capital.

In the 12 months to March the asking price for Greater London slid by 3.8 per cent, 5.5pc in inner London and 2.2pc in the peripheral boroughs.

Of all the London boroughs, the biggest annual asking price falls were recorded in Kensington and Chelsea (8.3%), followed by Lambeth and Tower Hamlets.

Rightmove analyst Miles Shipside describes the market as being on hold. “While March marks the start of spring, temperatures have yet to rise in the London housing market.

"Brexit uncertainty will no doubt have played a part in dampening the usual spring bounce, though this gives a negotiating opportunity for the new crop of buyers who traditionally start looking at this time of year.”

However, the slow market cannot be wholly pinned on the political climate. London is still cooling down after the frenetic house price recovery from 2010 to 2014.

“London and some of its commuter belt are suffering from a post-boom hangover, with prices now having to be far more sober to attract buyer interest. The capital had a period of intoxication with a heady mix of high demand, low interest rates and higher salaries.

"Buying activity remains restrained as some potential buyers await a more settled political climate,” says Shipside.

Tom Gatzen, co-founder of the website ideal flatmate, agrees: “With such buoyant inflation in property prices over previous years it’s only natural that London is now the drag on the UK housing market. Many are forced to readjust their price expectations.

“This could be a temporary pause, with the possibility of a bounce-back if and when there is a Brexit outcome that gives buyers more confidence and more certainty,” he adds.

London is now the anchor, pulling down the average UK asking price. According to the Rightmove report the typical national asking price nudged up 0.4 per cent (or £1,278).

Such a modest increase is unusual for this time of year. In fact, it is the smallest rise from February to March since 2011. The number of sales agreed by agents in March was seven per cent lower than last year, the data also showed.

The greatest increase in asking prices was seen in the North West (3.4%) and Scotland (2.5%). These regions tend to lag the housing market cycle and are now enjoying a late recovery from the effects of the financial crash.

“Although the focus will inevitably turn to the woes of the capital and surrounding regions, elsewhere around the nation it seems that Brexit uncertainty has become nothing more than a wife’s tale,” says Colby Short, the founder of website Get Agent.

“Scotland and the North West in particular are not only holding firm but asking price growth is outstripping the UK average by some six to eight times respectively. This positive market sentiment is indicative of the UK’s fragmented property landscape and while the amateur dramatics of Westminster continue to play their part, these stronger pockets have already moved on to the next act.”

It only took 55 days to sell a home in the Scotland compared to 82 in Greater London – the slowest pocket of the country.

"We are in a very fickle market, full of micro-markets depending on location and price point,” says James MacKenzie, head of country for Strutt & Parker.