Biggest annual fall in London home prices in 8 years

LONDON • London house prices posted their largest annual drop in almost eight years in April, as buyers shunned the capital's central areas.

The average asking price in the city fell 1.5 per cent to £636,777 (S$1.14 million) this month from a year earlier, the largest annual decline since May 2009, property website Rightmove said yesterday. On the month, asking prices in London decreased 2 per cent.

London's housing market has underperformed, compared with the rest of the country, since the start of last year, after home demand was hit by unaffordable valuations, the Brexit vote and tax increases on investors. 

More expensive homes are suffering the most as London's inner areas posted a 4.2 per cent annual decline, while prices in its cheaper outer suburbs were up 1.7 per cent.

"While the rest of the country enjoys a spring surge with most regions seeing a price boom and new price records, some parts of the London market are still re-adjusting," said Rightmove director Miles Shipside.

"The more discretionary upper end of the market is having to tempt buyers with cheaper asking prices, offsetting the higher purchase taxes."

HOUSING DOWNTURN

While the rest of the country enjoys a spring surge with most regions seeing a price boom and new price records, some parts of the London market are still re-adjusting.

RIGHTMOVE DIRECTOR MILES SHIPSIDE

For the United Kingdom as a whole, prices rose 1.1 per cent on the month in April, according to Rightmove.

That was still was slower than the average monthly gain of 1.6 per cent seen at this time of year over the past seven years.

The national annual increase of 2.2 per cent was the weakest since April 2013.

The loss of momentum may signal that buyers are becoming more cautious as accelerating inflation erodes real earnings and the start of the formal process of the United Kingdom to leave the European Union clouds the economic outlook.

A separate report from Deloitte yesterday showed consumer confidence fell in the first quarter.

The survey of 3,000 Britons was carried out between March 17 and 20.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 25, 2017, with the headline 'Biggest annual fall in London home prices in 8 years'. Print Edition | Subscribe