London set for period of underperformance

While housing market activity has been easing across the country, London has experienced by far the largest slowdown. Demand has contracted sharply thanks to prices which have reached a record high in relation to earnings. At the same time, given its higher than average loan-to-income ratio, London has been particularly affected by last year’s tightening in mortgage regulations, which have increased lender caution. Transactions in prime central London have also slowed thanks to uncertainty over a possible mansion tax.