London house prices might fall due to various economic concerns

London's housing market saw decreased buyer demand in the first three months of 2025, with lower inquiries compared to the previous year despite lower interest rates. The new homes sector is also experiencing a sales slowdown, with developers reporting weak demand. The article attributes the downturn to factors like US tariffs, economic uncertainty, and rising mortgage affordability concerns. The stamp duty changes, while initially boosting sales, are now contributing to a more subdued market, as demand is expected to fall. Uncertainty regarding interest rate cuts and potential new taxes also contributes to the slowdown. There are concerns that these factors could undermine the government's housing goals. Developers are unlikely to reduce prices directly but are expected to offer incentives. US tariffs add to existing uncertainty, potentially impacting buyer confidence and the ability of developers to build new homes. The market faces a complex situation with several economic headwinds.