A drop in the value of UK shares has fuelled fears of a housing crash as the UK economy slowed to a crawl.
The drop in London property prices has fuelled concerns about a potential downturn in the property market and the country’s future trade balance.
A fall in the price of the average house in London, which has slumped by a third in the past year, has also fuelled fears that the UK’s trade balance could become unstable, as well as an erosion of the value that households and businesses earn from owning homes.
A drop of 20 per cent in house prices over the past 12 months has been blamed on Brexit fears, with some predicting a collapse in home ownership and higher house prices.
“There is a fear that if the Brexit vote doesn’t happen, and the economy continues to weaken, that we could see a house price collapse, that is a very big fear,” said Alex Fergusson, senior economist at Investec.
“That is the main worry, that there is a real possibility that the market could crash if we don’t get this done in the first half of next year.”
The fall in house values has led to fears that Britain’s economic recovery could be cut off in its tracks.
The government is now looking at raising the capital gains tax rate from 30 per cent to 35 per cent and lowering the threshold for people who are in the labour force to 60.
However, that could prove politically challenging given the government’s insistence that it is not going to raise the income tax threshold, the threshold that would be required to trigger higher taxes.
The latest figures from the Office for National Statistics showed that house prices in London fell by 14.6 per cent between January and March.
The UK’s housing market is set to remain the countrys largest since it was hit hard by the global financial crisis.
A survey published on Monday by the Office of National Statistics found that there were 7.9 million properties in London with a value of more than £1 million, up from 6.2 million in February and 5.9 in March.
That represents a fall of nearly 6 per cent from the year before.
The increase in London house prices was largely driven by the construction sector, which saw the construction of new homes increase by 9.5 per cent.
The housing market in the capital’s east also saw a surge in the number of properties with a market value of over £1.5 million.
A decline in the cost of buying a house in the city is one of the main reasons for the property bubble.
It is now expected to shrink to around 6 per million by 2023, according to a survey by the real estate company LendingTree.
The biggest jump in house price came from the area of London where the capital is located.
According to a report from Zillow, the average price of a home in London’s south-west increased by 4.7 per cent, from £829,000 in the year to March to £872,000 the year after.
That was the biggest increase in value in the region.
In comparison, in the south-east of England, the price index in London rose by 1.2 per cent the year-ago period, from $1.082 million to $1,012 million.
That is also down from 2.7 percentage points a year ago.
The London property market is likely to remain in an area of high volatility for some time.
The last time there was a sharp fall in prices was in 2008, when the London Stock Exchange fell by 20 per a year to $2.50 per share.
However the global economy has slowed, and that could mean the UK is no longer a safe place to invest.