Asking prices for homes in London have recorded their biggest annual fall so far this decade and have dropped on average by £18,000 in the space of just a month, the property site Rightmove said on Monday.
But this headline finding masks much larger falls in some of the capital’s most expensive boroughs. The average asking price of a home in Kensington and Chelsea plummeted by more than £300,000 between August and September, and Camden was also hit hard.
That suggests that a slump in the high-end central London market, described by Rightmove as a readjustment, may be gathering pace as Brexit uncertainty continues and tax changes prompt many wealthy investors to sit on their hands.
Rightmove said it measured more than 98,000 asking prices, which represented around 90% of the UK market. The properties were put on sale between 13 August and 9 September. A spokesman said its updated methodology went back to 2010, and the annual fall of 3.2% for London was the largest drop so far this decade. The monthly fall in the capital is the largest since December 2016.
The figures come days after the Halifax said UK house price growth had picked up last month, with a 1.1% rise in August. This surprised some observers, because other surveys have suggested that the market was running out of steam. Nationwide building society said property values had dipped slightly by 0.1% to £210,495.
Rightmove said the average UK asking price for a home fell by 1.2%, or £3,660, over the past month to £310,000. This is the first fall recorded at this time of year since 2013. The website said, however, that the national average fall had been exacerbated by a 2.9% monthly drop in London, which it described as both large and unusual. Most of the rest of the country experienced smaller monthly falls or – in the case of north-east England, Yorkshire and Humberside and the east Midlands – small rises.
The typical price of property coming to market in London has slipped to £610,912, down £18,358 on August’s figure of £629,270. Rightmove said the fall had pushed the annual rate for the capital well into negative territory, and that it now stood at -3.2%, the largest year-on-year decrease so far this decade.
The figures disguise wide variations in the fortunes of the capital’s boroughs. The table of the biggest movers was topped by the UK’s most expensive place to buy a home, in Kensington and Chelsea. The royal borough is now a little more affordable because the typical asking price for a newly-marketed home there currently stands at £1.8m, compared with the £2.1m that a typical new seller was asking for in August. That is a reduction of £308,000 in a month.
A new seller in the north London borough of Camden is asking an average of 7% or almost £75,000 less than an equivalent seller a month ago. By contrast, the typical asking price in the central borough of Southwark leapt more than 9% from £618,000 to £676,000 between August and September .
Roger Collings, a branch manager at the estate agent RE/MAX specialising in Pimlico, Westminster, Mayfair and surrounding areas, said: “Since the introduction of the 3% surcharge on stamp duty paid by investors, along with the uncertainty as to how Brexit will impact London’s property market, investors have been standing on the sidelines.
“We are beginning to see more and more investors venturing back into the market, but we are still a long way from the volumes we saw pre-referendum” but “there are markets outside of central London that are still buoyant with local buyers.”
Mark Manning, the director of the Leeds and North Yorkshire estate agent Manning Stainton, said the region experienced “a fairly traditional summer slowdown” but outperformed its results from the same period a year ago.
“There has been a 10% increase in the volume of new seller enquiries over the last three months in contrast with the same period in 2016, and a more modest 2% increase in the number of new buyer registrations, but an increase nonetheless,” he said.
Brian Murphy, the head of lending at the broker firm Mortgage Advice Bureau, said the new data related to asking prices rather than completed transactions, “therefore enabling us to take a ‘temperature check’ in terms of market sentiment and behaviour”.
