The French bank has become the latest firm to predict a bleak future for the London property market saying that 30% could be wiped of prices.
Societe Generale has warned that London house prices could fall by over 30% shouldhighly paid city workers be forced out of the capitalfollowing the decision to leave the European Union.
There have been a number of predictions relating to the London property market since the referendum but this is by far the worst made yet.
So far it has been claimed that house prices in the capital were down 1.1% in the month following the vote (read more here) whilst demand was down 2% (read more here).
Societe Generale analyst Marc Mozzi said:“While in recent stress tests, the major U.K. banks were assessed with declines of around 30% in commercial real estate prices, we fear that London residential could experience an even more severe downturn.
“Brexit will damage the U.K. economy, and some companies will almost certainly have to relocate parts of their business to retain access to the EU single market.
“We do expect the recent rebound in real estate stocks may ultimately turn out to be just a ‘dead cat bounce’.”
A note sent to investors was seen by Sky News:
Whoa. SocGen: house prices in London's most expensive areas could halve in the wake of Brexit pic.twitter.com/YHHjvAgaTZ
— Ed Conway (@EdConwaySky) July 18, 2016
Yesterday Brexit minister David Davis said that there would be no guarantees about the future of EU nationals in the UK until reciprocal deals had been made for British nationals in Europe.
