London’s Property Market Is ‘Tanking,’ Green’s Vernon Says

House price growth at a standstill in October, says NationwideLondon’s real estate market, hurt by the Brexit vote, is “tanking by the day,” Green Property Chairman Stephen Vernon said.

The firm, which has closed its London office, is waiting for an opportunity to buy into the market at lower values, the 66-year-old said at a conference in Dublin. Vernon would consider buying a real estate company, raising a fund or buying a portfolio of assets in London, he said.

“It’s absolutely fantastic what’s going on,” said Vernon, who sold most of the firm’s properties in Ireland before values there crashed in 2008. A decision to re-enter the London market would be through a venture separate from Green Property and focus on commercial real estate, a spokesman for the investor said.

Office values in the City of London financial district fell the most in at least seven years in July after Britain voted to leave the European Union. Home prices in the U.K. capital fell for a fifth month in August, the worst streak since 2009, as higher taxes and the referendum result damped demand.

The referendum result, higher levies on business premises and a rise in the stamp duty sales tax have led to a reduction in London commercial property values, Derwent London Plc Chief Executive Officer John Burns said in a statement on Thursday.

“The central-London office market faces a number of challenges, including heightened global uncertainty, and business activity is likely to slow,” he said.

Developers tried to capitalize on rising rents by starting work on a record number of central-London office projects in the six months through March. That makes oversupply a threat to the market, UBS Group AG said in August.

More than 1,900 firms will probably review their office-space requirements in the U.K. capital following the vote, real estate researcher DealX said in July. International businesses could shift as many as 100,000 jobs away from London within two years of the U.K. officially starting a process to leave the EU because they risk losing their passporting rights, Jefferies Group LLC analyst Mike Prew said in June. That could cause demand for office space to fall, hurting rents and prices.

Home values in the U.K. capital face a “major shock” as landlords sell properties after tax changes, along with new lending rules, reduced returns to almost zero, analysts at Deutsche Bank AG said in June.

Sales of homes in London’s best districts fell 39 percent in the third quarter compared with a year earlier, according to researcher LonRes. About 45 percent of properties sold at a discount to the offer price in the three months after the Brexit vote, compared to about 35 percent in the same period last year.

Blackstone Group LP was the only bidder for Green Property’s Blanchardstown Centre in Dublin, Vernon said. The shopping mall was sold earlier this year for about 950 million euros ($1 billion).


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