The London real estate market is losing steam with sales struggling to complete.
Tax changes, Brexit uncertainty, higher house prices and difficulties in getting a mortgage approved are making it increasingly hard for people to buy homes in the U.K. capital.
Real estate companies have admitted that a slowdown in sales has affected their profits. London-focused chain Foxtons reported a loss of £2.5 million for the first half of the year, compared to a profit of £3.8 million a year earlier. Savills also said Thursday that residential transactions fell 7 percent in London during the first half of 2018, denting its profits. These were down by 18 percent in the first half of 2018, from a year ago.
Data from Reapit Group, a real estate software company, showed that, on average, houses in the Greater London region were withdrawn from sale after 5.7 months. Almost two-thirds of London properties for sale that departed the market in 2017 were withdrawn, not sold.
According to Gary Barker, chief executive at Reapit, 38 percent of the London-based withdrawals had actually received an offer from a prospective buyer but, in most cases, these were never accepted "indicating that offers fell below the selling price."
"The market might be constraining because buyers think they should get a good deal due to Brexit fears and sellers not wanting to drop their prices," he told CNBC via email.