The UK property market faced mounting uncertainty as the original Brexit deadline of March 29, 2019 approached, with London especially hard hit by falling transactions and plunging house prices.
Nationwide, house prices dropped 0.4% month-on-month in February and remained flat in March 2019 according to Office for National Statistics data. But London saw steeper declines, with prices down over 3% from January and prime central London values falling 6% annually in Q1.
London property demand evaporated amid no-deal Brexit concerns, with sales volumes collapsing up to 40% year-on-year in early 2019. The whole of the UK saw a 10% annual drop in transactions leading up to deadline day as political uncertainty deterred major purchases.
By contrast, the North East of England defied the downturn with small monthly price gains of 0.2% in both February and March 2019. However, even here sales remained subdued and annual growth was just 0.7% in March as Brexit caution prevailed.
In Essex, house prices held up better than nationally but completed sales were still depressed, with transactions down 6% annually in February 2019 as buyers delayed decisions.
With Theresa May's Brexit withdrawal deal rejected again in mid-March, the future outlook was clouded by uncertainty despite the eventual Article 50 extension. Buyers retreated to the sidelines, leading to plunging activity levels especially in vulnerable London.
Some positives included mortgage rates falling below 2.5% to improve affordability. But the market looked set for prolonged instability until Brexit plans solidified and confidence returned, particularly in the capital.
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