House prices in London are falling at the fastest rate in nine years, according to Halifax, Britain’s biggest mortgage lender.
London slump shrinks north-south divide in house prices
Prices in the capital were down 3.2% between January and March compared with the previous quarter, the sharpest decline since the depths of the financial crisis, according to regional data collated by IHS Markit and published by Halifax, part of Lloyds Banking Group.
London also recorded the sharpest fall in annual house prices since the start of 2011. Property values fell 3.8% in the first quarter from a year ago, following a 0.7% annual drop in the fourth quarter. London prices have been falling on a quarterly and annual basis since the third quarter of 2017.
Across the UK, house prices stalled in the first quarter. Paul Smith, IHS Markit’s economics director, said: “The subdued performance of the UK housing market, especially in the south of England, seems to reflect a general lack of appetite amongst households at present for activity related to major purchases in line with the general squeeze on real incomes seen in recent months.
“Allied with a general undercurrent of Brexit-related uncertainty, plus the likelihood of higher – albeit still historically low – interest rates later in the year, the market seems set to persist in a subdued state for the foreseeable future.”
The figures came as Britain’s property surveyors gave their most downbeat assessment of the housing market for five years.
The Royal Institution of Chartered Surveyors (Rics) said that demand from buyers fell for the 12th month in a row in March, new instructions from sellers declined for the seventh consecutive month and prices were flat nationally.
One surveyor, Toby Whittome of Jackson-Stops in London, said stamp duty increases and Brexit had “killed the fluidity of the London market”.
London house prices were and are too high – bad news for people living there and for those of us outside London as the impact of people selling houses in London and moving elsewhere tends to bid house prices up in those areas.
Some action on investment purchases and building of houses for the luxury market would help too. It’s not more houses London needs its building the right type and stopping the rise in population.