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Brexit is slowly killing off the value of prime central London land

Lianna Brinded
Head of Yahoo Finance UK
Photo: Reuters

Britain has just under three months to go until it leaves the European Union. But the uncertainty surrounding what the Brexit deal will look like is weighing heavily on business sentiment as well as major industries such as property.

The latest data from global estate agency Knight Frank revealed that uncertainty surrounding what the investment landscape will look like after 29 March has slowly been killing off the value of the most lucrative areas for land — prime central London.

Chart: Knight Frank

Land values have declined in prime central London by 2.8% in the fourth quarter, taking the annual decline to 5.6%. This is a huge amount when you look at the trajectory — values have tanked by almost 20% since the peak of the market in the third quarter of 2015.

Chart: Knight Frank

Knight Frank said that while properties in the area are selling, volumes remain low.

“The central London land market is also susceptible to negative sentiment relating to Brexit and land owners are in many cases choosing to wait for more clarity before choosing to sell,” it added.

READ MORE: What the average house price in London can buy you elsewhere

Meanwhile, head of market insight at SellMyHome.co.uk Fionnuala Earley, said that 2019 could be the year of improving rather than moving for the housing market.

Brexit is a key reason for prompting home owners to stay put, as well as other issues such as affordability and a lack of choice for buyers. Experts say house price growth will take a pause in 2019.

READ MORE: 2019 ‘may be year of improving not moving’ for housing market