Overseas buyers 'use Brexit as excuse to seek 10%-plus price cuts'

Knight Frank says overseas buyers are not only benefitting from a significant drop in the effective price of central London properties thanks to the falling Pound, but some are also using Brexit as an excuse to seek double-digit reductions in asking prices.

The agency says Sterling has weakened by over 15 per cent against the US dollar since the EU referendum in June. But it insists that this has had a more muted effect on the prime central London market than many other agents suggest, for two reasons.

The first is that some buyers from outside the UK have the "erroneous belief that the decision to leave the EU has triggered sudden price declines across prime central London [which] has caused some buyers to seek double-digit price reductions on top of a favourable double-digit currency swing" according to a briefing from the agency.

In reality, the agency insists that the high level of stamp duty has more effect than Brexit on the sales market in the most expensive parts of the capital.

The second reason is that some buyers are waiting to see if there is a further weakening in the Pound, making London property effectively cheaper still.

The agency says the current high levels of volatility in the Sterling/US Dollar exchange rate, often prompted by political statements, show the 'wait and see' strategy to be risky.