The capital's house prices in Q3 will be five per cent below what they were in Q2by Vicky Pryce / July 22, 2016 / Leave a comment
What the referendum result highlighted is the difference between London and the rest of the UK, particularly north of Watford. London voted overwhelmingly to stay. So did Scotland and Northern Ireland and a handful of English cities like Cambridge, Oxford, Liverpool and Bristol. But England, especially England north of the Thames, voted to “Leave” Europe.
The economic and social divide that led to the protest vote and was partly responsible for the “Leave” result has been much-discussed in recent weeks, and its existence seems to have taken people by surprise. Yet the data has been showing this divide clearly for some time.
Now the Brexit vote has raised serious doubts about the ability of the City to remain the financial centre of Europe. Much of the euro-denominated clearing the City does is in doubt. The “passporting” arrangements that allow financial institutions to sell anywhere in the EU from a London base may disappear unless a deal can be struck. The myriad services on which the City depends, involving accountants, lawyers, consultants and other professionals could suffer following the end of full access to the single market. It is feared that any restrictions on the free movement of people will affect the growth of the creative and high-tech sectors which all depend on skills which are imported. Foreign direct investment will suffer. Of course that might all shift the balance in favour of cities elsewhere in the UK—but in reality London is a net contributor to the economy of the whole of the UK. If London suffers the UK suffers.
House prices had until recently also shown a serious north/south divide. The average house price in London at £472,000 is more than twice the UK average, which is £200,000. The closest cities to this figure are Oxford and Cambridge at just slightly over £400,000. Average house prices in Glasgow are £111,600 and in Liverpool, £112,700. But the rise in London prices had begun to slow as a result of referendum uncertainty and the April 2016 tax changes. Also, people who were unable to afford to live in London were beginning to buy elsewhere, usually…