London house price growth halts

But rents continue to rise in the capital and around the country

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The Independent Online

House prices in London saw their weakest results for a year and a half, according to Hometrack, with no growth in July.

Across England and Wales prices grew 0.1 per cent in July, compared with an increase of 0.3 per cent in June, making it the slowest month since February 2013. Earlier this month, Rightmove reported that asking prices had fallen for the first time this year.

There was also a drop in the number of potential buyers registering with estate agents in July, down 0.9 per cent compared to June. Sales agreed also fell, by 0.3 per cent.

"Overall, market conditions have been strong since early 2013, as a result of pent-up demand returning to the market outside London and with buyers encouraged by low mortgage rates and the launch of Help to Buy, but it now appears that market sentiment is starting to change," said Richard Donnell, director of research at property analysts Hometrack.

"Seasonal factors always lead to a slowdown in demand and market activity in the summer months, but it is clear that there are bigger forces at work with a pronounced loss of momentum in the London housing market."

Around 11 per cent of London postcodes registered price falls with only 12 per cent showing any kind of rise.

Outside London, the report suggests that there was no house price change in Wales and the North East, with a 0.1 per cent rise in Yorkshire and Humberside, 0.2 per cent in the East, West Midlands and the North West, and 0.3 per cent in the South West.

East Anglia saw the strongest month-on-month jump at 0.5 per cent.

The year-on-year rate of growth was also slightly down, from six per cent in the 12 months to June to 5.8 per cent in the year to July.

A second report out today from Move with Us indicates that the national average advertised rent is now over £1,000 a month, with rent rises in London of 7.7 per cent in the last three months compared to the first three of the year. The average in the capital is now £2,334 a month.

Robin King, Director, Move with Us, said: “The second quarter of the year has seen average advertised rents in most regions continue to follow the growth recorded in the first three months of 2014.

"However, the divide between the North and South of the country was strongly accentuated in the last quarter. While rents in London, the South East and East Anglia performed well and increased steadily, regions in the North such as the North East and the North West experienced a slight decline over the same period. Scotland was the exception of the North, recording the highest annual percentage increase of any region in Britain, more than London and the South East."