London house prices continue to decline

Values falling at their fastest pace since the aftermath of the financial crisis

A man walks along an upscale residential street in London. Hannah McKay / Reuters

London house prices are falling at their fastest pace since the aftermath of the financial crisis, confirming the British capital as the worst-performing part of a slowing market.

Early data point to home values in London declining 2.7 per cent in September from a year earlier, the most since 2009, according to Acadata and LSL property Services. A 0.7 per cent fall in August marked the first negative reading since 2011 as sellers in some of the city’s most expensive boroughs, including Westminster, Wandsworth and Hammersmith, were forced to cut prices.

Outside of London and south-east England, the market appeared more buoyant, with prices on average rising in September by more than 3 per cent on the year, though the pace of growth has been slowing since the end of 2016.

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In London, values fell for a sixth consecutive month. If the provisional estimates are confirmed, the average price of a home in the capital was less than £582,000 (Dh2.8 million), the lowest since the end of 2015.

The fall will be welcome news to people struggling to get onto the housing ladder after years of rocketing prices. The prime minister Theresa May’s government announced an extension of its “Help to Buy” mortgage-assistance program earlier this month.

The downbeat picture was confirmed in a separate report from Rightmove, which said asking prices in London fell an annual 2.5 per cent in October. While they rose 3.1 per cent on the month, driven by owners of more expensive properties, achieving these prices is far from assured as buyers now have more choice, according to the Rightmove director Miles Shipside.