London property market stagnates – but Brexit isn't the only factor –and some areas of the UK see growth

This much we know: the ongoing lack of clarity about the terms of the UK's exit from the European Union is contributing to a stagnant property market so far this year. The latest House Price Index released by Halifax shows a 2.9 per cent fall in house prices in January 2019. 

However, Gary Barker, CEO of Reapit, who also helped to start Rightmove, cautions against attributing this downward house price trend solely to Brexit. 'With Brexit negotiations still in deadlock, it is unsurprising that the property market continues to stagnate, with just 0.8 per cent annual house price growth, and a monthly fall of -2.9 per cent. Little progress was made in January, and Reapit’s data shows that a lack of clarity has caused buyers and sellers to abstain from engaging in the market. Exchanges are now down by 16 per cent across Greater London, with 27 per cent fewer new listings in December 2018 compared to the same period in 2017.'

'However, there are other factors at work beyond Brexit: reasonable affordability, rising levels of employment and wage growth in the North and Midlands have attracted investors and first-time buyers alike, who are retreating from higher property prices in the Southern market. While growth in the South has slowed, we cannot ignore that growth remains elsewhere.'

In other words, while it is tempting to focus only on the short-term trend of the ongoing  Brexit negotiations affecting house prices, a more sensible approach is pay attention to longer-term trend, which has involved people moving out of London and the urban regeneration in the Midlands and the North. 

Barker concludes, 'Until Brexit is clarified, limited housing stock and strong growth in the North and Midlands will buoy the market, preventing any outright falls.'

Want a more detailed house price prognosis? Consult our expert UK house price forecast: what to expect in 2019.