Home Property House prices remain static in London

House prices remain static in London

by LLP Editor
31st Oct 11 4:45 pm

House prices in London have remained static after seven consecutive months of increases, according to a property researcher.

The slowdown in the capital’s housing market is expected to impact heavily upon average property prices across the UK, where values dropped for the sixth month running in October, Hometrack’s report said. Rising house prices in London have flattered the overall UK market in recent months, the report added.

The average cost of a UK home dropped by 0.2 per cent from September’s figures, the London-based property company said in its monthly report, while prices are now down 2.8 per cent on the same month last year. Hometrack’s survey has recorded a fall in UK property prices in all but one month since July last year.

Restricted lending from banks, inflation increasing faster than wage growth and higher unemployment have all weighed down on the housing market, adding to a generally gloomy outlook for the UK’s economy.

Hometrack director of research Richard Donnell said: “The evidence is clear that buyers are drifting away from the market in the face of weak consumer confidence and concerns over the prospects for the economy and their household finances.”

Demand also appears to be on the wane, with the number of potential buyers registered with estate agents dropping by 0.2 per cent from September, the third month running that Hometrack’s figures have fallen.

Donnell said an expected “slowdown in the capital will have a knock-on impact on the scale of price changes nationally in the months ahead”, after prices in London remained unchanged following “above average price rises” in recent months.

He said: “Growing consumer concern over the outlook for the economy is beginning to impact directly on house prices according to evidence from the latest monthly housing market survey from Hometrack, the property analytics business.

“Average prices fell by 0.2 per cent in October compared to falls of 0.1 per cent over each of the previous five months. The year-on-year rate of growth currently stands at minus 2.8 per cent. Above average price falls in the West Midlands, East Midlands and the North East, together with static prices in London – where average prices have risen consistently for the past seven months – lie behind the increase in the headline price fall.”

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