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London price falls drag down UK house prices

Written by: Emma Lunn
London house prices dropped 4.4 per cent in the year to May, the sharpest fall in a decade, according to the Office for National Statistics (ONS).

The average house price in London now stands at £457,471, 2.5 per cent low than in April. This is the biggest slide in the capital since August 2009, when there was a 7 per cent fall.

On average house prices across the UK have grown by just 1.2 per cent in the past year, with the average property now valued at £229,431. This is the slowest house price growth since 2013 and down from 1.5 per cent in April.

The ONS May data shows that, on average in England, house prices have risen by 0.1 per cent since April 2019. The annual price rise of 1 per cent takes the average property value to £245,817.

The South West experienced the greatest monthly price rise, up by 1.2 per cent, while the North West experienced the greatest annual price rise, up by 3.4 per cent.

Wales shows, on average, house prices have fallen by 1.4 per cent since April 2019. An annual price rise of 3 per cent takes the average property value to £159,428.

Jonathan Hopper, managing director of Garrington Property Finders, said: “Such a punishing drop in London house prices is a reminder that the capital’s correction is still underway. Above all, it suggests the modest slide in the year to April, rather than the breathtaking fall that followed it, may have been the blip.

“The scale of London’s fall – the largest seen since the recessionary plunge of almost a decade ago – is also a reminder of the definitive shift in the dynamic in the capital. Buyers are now setting the tempo, dictating terms in price negotiations and frequently able to secure additional discounts on properties that are already reduced.”

Paul Smith, CEO of Haart estate agents, said the constant uncertainty and political instability is impacting property markets across the UK, with London affected the most.

He said: “As we edge ever closer towards the 31 October deadline, and indeed the prospect of a potential no deal scenario, we can perhaps expect a further decline to London house prices over coming months, but thereafter more positive headlines.

“It is heartening to see however that prices are up across 85 per cent of the markets analysed, enforcing the resilience of the country and the need for many to move regardless of political uncertainty. The North West is the real star of the show, with prices continuing to rise. Investors and first time buyers eyeing up homes here should look to purchase now to get a good deal.”

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