More London home sellers are having to cut the asking price of their homes, and they’re offering deeper discounts as political uncertainty and high values dampen demand.
“Price cuts seen in prime central London in the immediate aftermath of Brexit are now filtering through to outer boroughs,” said Savills Plc residential research director Lucian Cook. “Affordability issues are now a problem after a decade of house-price growth, and buyers are finding they increasingly come up against mortgage-lending limits.”
London home prices have surged about 86 percent since 2009, meaning it now costs buyers 14.2 times their annual gross salary to purchase a property, the highest level on record and more than double the rate for the U.K. as a whole, according to Hometrack. As a result, the number of mortgages advanced to first-time buyers in London has dropped 12 percent in the two years through September, data compiled by the Council of Mortgage Lenders show. That’s impacting boroughs on the fringes of the U.K. capital as applicants need to borrow more than banks are prepared to lend under rules set out by regulators in 2014.
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