(Dec 17): London house prices fell for a sixth consecutive month in October, according to official data, the longest downturn since the financial crisis.
The average value of a home sold in London has dropped 4.2% since April to £547,300, the equivalent of £24,000, seasonally adjusted Land Registry data published on Wednesday show. Prices in the capital last recorded a longer run of losses between 2008 and 2009 when Britain was in the grip of the global credit crunch.
London, once a byword for red-hot house price inflation, is now the UK’s worst-performing market. An increase in transaction costs in April, followed by fears that the Labour government would increase taxes on high-value properties, have disproportionately hurt buyers and sellers in the capital.
Property agents are already warning that Chancellor of the Exchequer Rachel Reeves’ so-called mansion tax, an extra levy on residences worth more than £2 million announced in the Nov 26 budget, is adding to the turbulence. The Royal Institution of Chartered Surveyors’ gauge of London property values posted its lowest reading in two years last month.
On an annual basis, London house prices are down 2.4%, the largest drop of any region. In contrast, average home prices across the UK have increased 1.7%, although that growth rate has also started cooling.
See also: UK inflation drops more than expected ahead of BOE decision
The sharpest falls over the past year have been London’s most expensive areas, with Kensington & Chelsea and Westminster both recording declines of over 16%, while Camden and Hammersmith & Fulham dropped around 7%, Land Registry data published by the Office for National Statistics show. The city has also been hit by an exodus of wealthy foreigners fleeing a crackdown on so-called non-doms.
While London house prices remain twice as expensive as the UK average, affordability has been improving in recent months. A Bloomberg analysis showed that a typical Londoner can now expect to pay just below nine times their annual pay for an apartment, the most affordable level in 12 years. Adjusted for inflation, apartments in the capital are 22% cheaper than a decade ago.
Uploaded by Felyx Teoh
