London Housing Market: A Decade in Brexit's Slow Lane

London used to lead Britain's housing boom. Since the Brexit vote, it has slipped to the back of the pack. A decade on from the referendum, the London housing market has grown far slower than the rest of the country, weighed down by political uncertainty, the pandemic and a run of economic shocks, according to new research by Savills.

The gap that tells the story

The numbers are stark. Average London house prices rose just 9 per cent between 2016 and the first quarter of 2026, against a national average increase of 40 per cent over the same period. That is a sharp reversal for a city that had surged 92 per cent in the decade running up to 2016.

The turn came quickly after the vote. Savills found that London prices had risen 15 per cent in the year to March 2016, only to fall 3 per cent in the 12 months to May 2019. Growth did not just slow; it briefly went into reverse.

Why the slowdown set in

Confidence was the first casualty. Lucian Cook, head of residential research at Savills, said the political turmoil before and after the vote dragged on buyer confidence, and that the effect was most acute in a cosmopolitan capital like London. Uncertainty pushed many buyers and investors to delay, while worries about jobs in the city's financial sector added to the caution.

The drift lasted years. Knight Frank's Tom Bill pointed to a period of stagnation between 2017 and 2019, when Theresa May's government was in a precarious position. Tony Mulhall of the Royal Institution of Chartered Surveyors put it more broadly, arguing that Brexit not only made buyers press pause but also altered the long-term trajectory of the London market.

Brexit, or everything that followed?

Pinning the blame purely on Brexit is harder than it looks. Its impact was compounded by Covid-19, rising inflation, higher interest rates and the cost-of-living crisis, which makes the isolated effect difficult to measure. "It hasn't helped, but it certainly wasn't the total disaster that was forecast," said economist Jennet Siebrits, who rates the pandemic, the furlough bill, inflation and rate rises as far more damaging.

Brexit did leave its own marks, though. The research notes it disrupted labour supply and construction activity, feeding a decline in new housing starts across London, which tightened supply even as demand wobbled.

Why the London housing market still has believers

For buyers, the picture is tough. Affordability has worsened to the point where house prices now sit at around 12 times average earnings, and first-time buyers face deposits approaching £150,000. A decade of slow price growth has not made London cheap, only less rewarding for owners.

Even so, analysts are not writing the city off. Cook called it one of the most disrupted stretches the housing and development markets have ever seen, yet argued that London's access to Europe, its language, culture, leisure, retail, time zone and education leave it well placed to prove resilient over the next decade. London, in his view, is still London, just emerging from an unusually rough patch.

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