According to the Office for National Statistics (ONS) house prices in London fell at their fastest rate in May for almost a decade.
The ONS said in the residential property sector there has been a 4.4% decline on an annual basis, marking the largest downward slide in the capital since the 7% reduction recorded in August 2009.
Property experts have blamed Brexit uncertainty combined with “punitive” stamp duty costs and across the UK house price growth remains slow.
The ONS and Land Registry has said that northern areas and Wales are seeing stronger house price growth.
Wales has seen house prices increase annually by 3% to reach £159,000, Scotland has risen by 2.8% to £153,000 and in England a slower rise of just 1% to £246,000.
The north west saw the highest annual house price growth by 3.4%, and the west Midlands rose by 2.7%.
In the year to May the average UK house price rose by 1.2% which has slowed from the 1.5% increase seen in April. The average house price for May stood at £229,000.
London prices have plunged over the year, but the capital still remains the most expensive place to buy property with the average property price being £457,000.
The ONS report has revealed that London house prices have been dropping since March 2018.
ONS head of inflation Mike Hardie said, “Annual house price growth remained slow but was once again strong in the North West and Wales.
“However, London experienced its biggest annual fall since August 2009.”
Jonathan Harris, director of mortgage broker Anderson Harris said, “House price growth is slowing as sentiment continues to weaken, partly as a result of Brexit uncertainty.
“While prices fell in London by 4.4% over the year to May 2019, affordability is still an issue for those buying in the capital and South East as prices remain relatively high compared to incomes.
“Mortgage rates remain low and continue to support transactions. Re-mortgaging remains strong as many people stay and improve rather than footing the considerable bill for a move to another address.”
Gareth Lewis, commercial director of property lender MT Finance, said, “The South West (where prices increased by 2.6% annually) and North West have shown reasonable growth over the past year and are propping up UK average property prices.”
Marc von Grundherr, director of lettings and estate agent Benham and Reeves said, “The market may continue to be dampened by price growth in London and the South East, but any transaction at a premium level will take longer to materialise and so it will take time for these regions to regain the momentum we are currently seeing build across other areas of the UK property market.
However, the proof is in the pudding, and although price growth may remain muted, these ‘slower’ markets are still home to the highest property prices in the UK.
It will take far more than a prolonged period of Brexit uncertainty to chink the armour of the UK property market and as we are already seeing so far this year, it has remained impenetrable despite the continued debacle unfolding down in Westminster.
Shepherd Ncube, founder and CEO of Springbok Properties said, “Unless you’re trying to sell the rock you’ve been hiding under for the last three years, Brexit uncertainty is, of course, going to be a consideration when looking to sell and the price at which to do so.
For those more concerned about that first foot on the ladder rather than the financial gain it might bring, it continues to be business as usual as demonstrated by the heightened market activity and ensuing house price growth in the more affordable regions of the UK market.
Market uncertainty remains more of a factor in the less affordable areas of the market, but the grass isn’t always greener, and for those looking to move now a few thousand pounds less on a sale is a more palatable compromise than months of stagnation on the market.”
Sam Mitchell, chief executive of online estate agent Housesimple, said: “House price growth remained somewhat subdued in May, but this does not tell the whole story…
“London’s price fall has plagued the UK average partly due to uncertainty but mainly because of the punitive stamp duty regime, while slowdowns in the South and East of England over the past three years have also taken their toll.
“Yet economic factors that underpin the property market are looking strong.
“Plus, the housing market is still showing sturdier than expected signs of resilience amid political uncertainty.
“Low unemployment and historically low interest rates are leading to high demand from buyers supporting house price growth, particularly in the North West and West Midlands.”