Brexit Housing Crash Fears Stay in London as Regions Catch Up

The Brexit-inspired decline in London’s property values has yet to cause any serious ripples in other areas of the U.K.

While price-growth and activity may be slowing amid the uncertainty, almost every other major urban area in the country is still experiencing a rising market, according to Acadata. It’s a national divide that’s all too apparent to real estate agents in northern England who aren’t too worried about the U.K.’s departure from the European Union.

“It’s a different world from London in the north,” says Jonathan Morgan, sitting in the Leeds office where his property management company Morgans has operated for more than two decades. Reeling off a list from 15 percent interest rates to the global financial crash, he smiles calmly. “It will be fine because we’ll make it so. We’ve faced crises before.”

Yorkshire house prices have been far more resilient than London's since Brexit vote

Behind him the noise of construction creeps through the windows from workers refurbishing the 19th-century cast-iron Leeds Bridge, originally built when the city — 200 miles (320 kilometers) north of the capital — was rapidly expanding and flush with the wealth of the Industrial Revolution.

Now, it’s looking forward to a more modest investment surge — the government is moving 6,000 civil servants to the city and broadcaster Channel 4 is relocating its headquarters there, while a high speed rail project will bolster transport links.

While such plans are likely boosting interest in Leeds itself, the property market is humming along across large swathes of the country. Land registry data, released Wednesday, shows annual price growth of 2.9 percent for Yorkshire and Humber in January, and increases of 4.4 percent in the East Midlands and 3.4 percent in the northwest. London declined 1.6 percent — the most since 2009.

Supporting Factors

Prices elsewhere are supported by the same factors underlying Britain’s property boom for years — low interest rates, growing employment and a short supply of homes. Outside of the capital, the market’s benefiting from a tax cut on cheaper homes. Most of the time values have increased with a lag and at a far slower pace compared with London, but now the tables have turned.

With Britain’s future outside of the EU still as unclear as ever, the London market is taking the biggest hit. The capital’s asking prices dropped 1.1 percent in March from a month earlier, according to Rightmove, while the national measure rose 0.4 percent.

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