London Real Estate Suffers Largest Drop In A Decade

London continued to lead the pack amid the UK's weakening property market at the start of 2019, according to Bloomberg, which reports that prices have fallen the most since the financial crisis a decade ago. 

Values in the capital dropped 3.8% year-over-year according to the Nationwide Building Society, marking the seventh straight decline. The lackluster performance leaves London as the worst-performing region in Britain. 

Brexit, of course, is to blame according to some: 

Some of weakness relates to Brexit, which is having an impact on sentiment. Consumer confidence remains close to its lowest level since 2013, according to GfK.

The Bank of England said on Friday that mortgage approvals dropped last month. Business investment fell for a fourth quarter at the end of last year, the statistics office said in a separate report.

The uncertainty over when and how the U.K. will leave the European Union has gotten worse this month as the government extended the deadline, having so far failed to get lawmaker approval for its exit deal. Still, a shortage of homes, record employment and low interest rates are preventing an even sharper downturn in the property market. -Bloomberg

It's not all terrible, however. Nationwide property values rose 0.2 percent in March from February, while the annual rate of change improved to 0.7% from 0.4% - or relatively flat. 

As we noted last August, UK house price growth slowed last June to the lowest annual rate in five years according to official figures, likely driven by falling prices in London, Brexit and increasing economic and geo-political uncertainty.

The UK’s annual house price growth rate has been on a downward trajectory since mid-2016.