Fall in London house prices ‘will chill all of UK market’

HOUSE prices in London are falling at their fastest rate since the financial crisis – stoking fears of a slowdown in the wider UK market.

Property values in the capital fell by 4.4 per cent in a year to May, with industry figures blaming Brexit uncertainty and increases to stamp duty under former Chancellor George Osborne

It brought the price of an average London home down to £457,471, a drop of £21,014 compared with a year previously, according to the Office for National Statistics and the Land Registry.

The fall was the biggest since August 2009, when prices crashed by 7 per cent.

It is now feared this fall will filter through to the rest of the country because London is often the first market to show signs of wider trends.

Across the UK as a whole prices rose, but at a slower pace than previous years as the poor performance in the capital held the rest of the country back.

Experts have warned nervous buyers are

‘Finding life challenging’

waiting while Brexit uncertainty persists, with sellers also holding back from putting their properties on the market in the hope that values will rebound when the situation calms down.

Howard Archer of economic forecasting group EY Item Club said: ‘The overall impression is that the housing market is still finding life challenging amid major uncertainties, although there are significant variations across regions.

‘There are signs that activity may have got a little help from the avoidance of a disruptive Brexit in March but the overall benefit looks to have been limited.’

The average price of a UK property rose by 1.2 per cent to £229,431 in May – but this compared with 3.1 per cent annual growth in May last year and 4.2 per cent in 2017.

In London the prices of very expensive homes fell the most sharply, partly because stamp duty rises hit such properties the hardest. Experts say this has a knock-on effect on the whole market.

There was still growth in other regions. The average value of a home in the North West rose by 3.4 per cent to £164,261 and in Wales it rose three per cent to £159,428.

In the South East, the least affordable area in the UK outside London, prices edged up by 0.6 per cent to £323,745.