London continued to be the worst performing region in Britain when it comes to house prices, with values falling by 0.8% between October and November 2017, official data published yesterday by the Office for National Statistics (ONS) revealed.
Monthly property price growth across the country slowed in November to 0.1% taking the UK average to £226,071, dragged down by the poor performing market in the capital, where house prices unsurprisingly remain significantly higher than elsewhere in Britain, at an average of £482,000.
Nick Leeming, chairman at Jackson-Stops, points out that throughout 2017, the prime central London housing market was inundated with buyers and sellers taking a ‘wait and see’ approach, which had a detrimental effect on the fluidity at the lower to middle ends of the market as well as the top.
He said: “Punitive stamp duty rules can be blamed for halting transaction levels and if steps are not taken to reform the impact stamp duty has on the top end of the market, even just marginally, we cannot expect sales levels to increase or prices to change in 2018.”
Jonathan Hopper, managing director of Garrington Property Finders, believes that London has been “a victim both of its own success” following “years of unsustainable, double-digit price inflation”.
He added: “Despite a shortage of stock, the capital is now seeing a marked correction as sellers reduce prices in an effort to woo back domestic buyers, many of whom have been searching for better value beyond the M25.”
The ONS data comes a day after Rightmove reported that asking prices in the capital had dropped by 3.5% in December compared to the year before – the biggest fall since June 2009. This equates to an average fall of £22,000 in a year with properties in Zones 2 and 3 experiencing the greatest declines, of 6.4% and 7.7% respectively.
“Although 2017 has been a surprisingly robust year for the housing market in the face of strong Brexit headwinds, all the headlines will be about the London property market hitting the buffers,” said Alex Gosling, founder of online estate agents HouseSimple.com.
“The capital is now feeling what many areas of the country have felt for a decade, which is stagnant property growth. Unsustainable price rises have finally caught up with the London market,” he added.
Graham Davidson, managing director of buy-to-let specialist, Sequre Property Investment, reports that many buy-to-let investors are now looking to take advantage of the market in the North West of England, which was the among the best performing regions, with 6.2% annual growth, along with high rental yields and strong tenant demand.
He commented: “For buy-to-let investors, it’s clear that London remains a no-go – the capital growth is simply not there and investors are selling up and shipping out, whilst buyers and tenants are looking further afield for better value for money, no doubt as a result of the unsustainable and unaffordable London market.”