London house prices fall for first time in eight years, says Nationwide

London house prices fall for first time in eight years, says Nationwide

London house prices fell for the first time year-on-year since the height of the financial crisis, underperforming the rest of the UK, Nationwide has said.

In the month of September, average prices in the country slowed to a 2 percent annual gain and increased 0.2 percent from August.

"Low mortgage rates and healthy rates of employment growth are providing some support for demand, but this is being partly offset by pressure on household incomes, which appear to be weighing on confidence".

The East Midlands saw the strongest quarterly growth of 5.1 per cent in the three months to September, while the South West (4.8 per cent) and the West Midlands (4.6 per cent) also performed well.

United Kingdom house prices increased at a slower pace in September, data published by the Nationwide Building Society showed Friday.

London's downturn meant it was the weakest-performing region for the first time since 2005, figures published on Friday showed.

More news: Prince Harry, toddler steal show as she steals his popcorn

Jeremy Leaf, an estate agent and former RICS residential chairman, said the slowdown was driven by bloated prices, slow progress in Brexit negotiations, and worries about an imminent interest rate rise from the Bank of England, which would drive up mortgage costs.

The average price of a home in the capital is £471,761, down by 0.6% between July and September compared with the same period previous year. On a national level, house prices rose 2.2% to £210,982. Rates are at an all-time low of 0.25%, and economists believe the monetary policy committee could vote for an increase to 0.5% as early as November.

"London has seen a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, albeit by a modest 0.6%".

Mr Gardner said the impact of an interest rate rise on United Kingdom households was likely to be "modest" because it would affect a smaller proportion of borrowers than previous rate increases.

Average growth in the United Kingdom remained steady at 2% - up 0.2% month-on-month.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said the report "brings fresh evidence that the housing market still is in a weak patch".

Related Articles