London house prices rise for first time since 2017

New seller prices so far in August up 1.3 per cent from a year earlier, property website Rightmove said in a report published Monday

A residential street in Hackney, east London. House prices in the UK capital are showing signs of revival. AFP

Asking prices for London homes showed their first annual increase since 2017 this month, as the Brexit-battered market started to show signs of life.

New seller prices were up 1.3 per cent from a year earlier, property website Rightmove said in a report published Monday. They eased just 0.1 poer cent on the month, the smallest decline for any August since 2006.

Rightmove said a shortage of supply is helping to underpin prices, with the number of new sellers down almost 11 per cent on the year. Meanwhile, sales agreements jumped in what is normally a slow month, suggesting buyers and sellers alike are now taking the plunge after years of waiting for Brexit to be resolved.

“It’s been three years since the vote and Brexit fatigue has kicked in,” Chris Osmond, sales director at London-based estate agent JOHNS&CO, said in a comment accompanying the report. “After all, life goes on and you can only put plans on hold for so long. We’ve also seen the number of vendors wanting to cash in on long-held investments increase.”

August also saw the largest number of sales nationwide in four years. Rightmove director Miles Shipside said that uncertainty ahead of the October 31 Brexit deadline had potentially encouraged homeowners to sell earlier in the year than normal.

Chancellor of the Exchequer Sajid Javid is mulling stamp duty reforms for UK home sellers as part of a budget due later this year, he told The Times in an interview published on Saturday.

While the newspaper reported that tax burden would be shifted from home buyers to sellers to give larger tax bill for those who have benefited from rising property prices, Javid later said he won’t support that in a tweet. Nevertheless, “we need bold measures on housing”, he said.

The property market has struggled in the recent years, with the prospect of Britain leaving the European Union weighing on prices. London has been particularly badly affected. A separate report by Acadata found house prices in the capital barely rose in the year through June, with several areas losing more than 10 per cent.

Across the country, the picture is mixed. Asking prices were lower than a year earlier in the south-east and the south-west, while northern England, Scotland and Wales - regions where house prices are cheaper on average - showed solid increases, according to Rightmove.