Since 1973, when Great Britain joined the European Union, the average price of real estate in London increased 36 times. The last significant reversal of this trend occurred during the financial crisis when prices fell by about 20 percent. However, since 2009, they have almost doubled.  This time, price drops are still small. In February in London, the first annual price drop was recorded for over eight years and amounted to 0.1%. In March, the annual decline amounted to 0.7 percent, but in more expensive districts in the city centre it was larger, and there are also factors announcing further declines, such as the time needed to sell real estate.

Pessimists are concerned that some of the pillars on which the long-term increase in London property prices - from record-low interest rates to generous government support - were at risk. No doubt the Uk government is making the entrance on the property ladder very easy with help to buy and the ISA scheme. However, dropping house prices will put those at risk ultimately the terms of the loans are dictated by risk.

The investment advantage of real estate over bonds decreases and the government increases taxes for the purchase of a second property and introduces changes in tax relief for loans for the purchase of a real estate for rent. Brexit creates uncertainty, the planned date falls in less than a year, and the conditions remain unclear.  However, not everyone thinks that Brexit or interest rate hikes will turn the property market upside down. The drop in the value of the pound after the referendum on leaving the European Union in 2016 weakened its effects somewhat, as the London real estate became more attractive to investors from abroad at this time.

Going beyond Brexit - it is the possibility that Labor leader Jeremy Corbyn will become prime minister. During the last year's elections, he promised to introduce limitations on the number of rents and other, less profitable solutions for business. It will be interesting what will happen in the next few months as we approach Brexit which seems to be a vanishing point. The average house price in London fell by 3.8% to an average in just three months from the beginning of the year compared to the same period in 2018. Despite the weakening market, it is still very desirable is not the most desired area of investment. We must remember that the property market is always on the rise in the long term. 

Richard Butler Creagh is a Property and Finance Consultant and was the first in the UK to identify the need for reliable and fast bridging finance helping thousands of developers and property professionals get the funding needed.  Learn more about Richard Butler Creagh, the founder of Henley Finance. Read more about Henley Finance which is a bridging lender company that invests in UK property here.