London’s property prices fall as Brexit-fuelled inflation eats into incomes

LONDON — Property prices in London have fallen for the first time since 2009, as rising inflation after last year’s Brexit vote hits Britons’ purchasing power, according to an index published Friday.

Average home prices in the capital slid 0.6% in the third quarter or July-September period compared with a year earlier, home-loans provider Nationwide reported in its latest survey. That was the first year-on-year decline in the index for London since the third quarter of 2009. However, Nationwide also said that average prices across Britain rose 2.2% over the same period from a year earlier."Low mortgage rates and healthy rates of employment growth are providing some support for demand, but this is being partly offset by pressure on household incomes, which appear to be weighing on confidence," the lender said in a statement. The average price of a home in London was almost £472,000 ($632,000) in the third quarter, more than double the national average of £211,000, according to Nationwide. British households’ purchasing power has taken a hit because of the rising cost of imports after last year’s referendum vote to leave the EU, which pushed down the value of the pound.

British salaries fell by 0.4% between May and July compared with the same period a year earlier when adjusted for inflation, recent official data showed.

Britain’s property market could also suffer if the Bank of England (BoE) were to raise its main rate from a record-low of 0.25%, which would push up the cost of mortgages.-AFP