The slump in London house prices so far this year has already wiped out most of the gains made in the last half of 2002, new figures show today. The average asking price for homes on the market in London fell 0.2 per cent this month with 20 of the 32 boroughs registering falls as high as 4.5 per cent, according to a survey of estate agents.
On an annual basis house prices in the capital are just 2.5 per cent higher than a year ago, a sharp fall from May's 6.8 per cent, according to the survey by Rightmove, a property website. If the trend continues, the capital will be on track for its first annual fall since the crash of early 1990s.
The new data comes a day after Sir Edward George, the retiring Governor of the Bank of England, argued that deflation in the south was unlikely to spread across the whole of the UK. "We don't think there is a real risk of a crash, a fall in the level of house prices across the country as a whole," he told the BBC's Breakfast With Frost. "But we do see a continued moderation to a stabilisation possibly over the next couple a years."
The national picture described by Rightmove is of an average increase in house prices of 1.3 per cent over the past month. That annual inflation rate has come down to 14 per cent.
The gloom in London, reflected across southern England, still contrasts with the Midlands and most northern counties, which are enjoying a price boom. However prices in Yorkshire and Humberside fell by 1.2 per cent, the first fall of any northern region this year, which Rightmove said might be a sign that weakness in the south was spreading north.
There was further evidence of weakness from the increase in the number of unsold properties which has risen to 63 per estate agency branch from 40 a year ago. The time taken to sell a property has risen from 47 days to 63.
Miles Shipside, Rightmove's commercial director, said: "Activity levels are far below what we were seeing last year. We're in a transitional phase as prices cool, buyers bide their time and stock levels start to stabilise."
The northern uplift meant that the average asking prices in the UK rose 1.3 per cent, the fifth successive month of increase.Reuse content