UBS: Here

LONDON — Investors in London's housing market can expect a shaky
year, according to UBS Wealth Management.

In a note sent to clients, strategist Caroline Simmons said
surveyors expect prices in the capital to fall by 0.4% this year,
compared to a 2% rise in 2017.

House prices across the country are expected to rise by 4% in
2018, which means a historical trend has been reversed: London is
now lagging behind the rest of the country in terms of price
growth.

London outperformed the UK consistently — until
2017

Land Registry, UBS, as of 31 October
2017

(
Annual London vs UK house price growth, y/y)

Average London prices have underperformed the UK only once in
the last 10 years, but growth in London was below the UK
average in every month of 2017.

"London has likely underperformed due to higher prices in
London, and thus lower affordability; with less benefit from
government initiatives [like Help-to-Buy], and greater impact
from tax changes in the past few years," Simmons wrote.

Prices in Prime Central London — where a £1 million house
counts as a bargain — have fallen the furthest, down 7.4% on
average from their 2007 peak, according to data from Knight
Frank, but the rate of decline appears to be slowing. The
year-on-year rate of decline bottomed in January 2017 at -6.7%,
and moderated at -2.2% by the end of November.

Greater London's negative price outlook could be starting to
stabilise, too. November 2017's reading from the monthly RICS
poll of surveyors marked 22 months of almost consistently
negative price expectations, and more surveyors still expect a
fall in London house prices than expect a rise.

But the month on month proportion seems to be shrinking:
November's reading was the lowest since the EU referendum in
June 2016, while December's reading was the lowest since at any
point since April last year.

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