London house prices fell steeply in September, following a year of exceptional gains across each of the capital’s boroughs.
Data published yesterday by the Land Registry shows London house prices fell 0.7 per cent in just one month. However, prices are still elevated; they are 18.4 per cent higher compared with September 2013.
The price dip marks the first monthly drop for a year and was part of a wider slowdown across England and Wales, where prices fell 0.2 per cent on the month. However, house prices in England and Wales are still 7.2 per cent higher than they were a year ago.
The average price of residential property in the capital is now £460,521 in comparison with the average for England and Wales which is £177,299.
The slowdown marks the end of an exceptional housing boom across London. Lambeth has seen the highest annual growth at 28.6 per cent. Growth was lowest in Redbridge, but was still 13 per cent annually – surpassing the England and Wales average of 7.2 per cent.
Kensington and Chelsea remains London’s most expensive borough, with an average house price of £1,341,654. This could buy five average priced houses in Barking and Dagenham, where prices are lowest.
“September saw house prices in the UK plateau,” said Jeremy Duncombe, director of the Legal and General Mortgage Club. “A cooling of the rapid house price rises seen so far this year is no bad thing and may be due in part to the uncertainty over what will happen to interest rates.”
Other commentators have attributed the slowdown to stricter mortgage rules introduced in April and stretched price-to-earnings ratios.
The cooling market is negatively affecting estate agents – London agency Foxtons saw their share price tumble after the release of disappointing results last Thursday.
The dip was seen outside of London too, with seven out of the 10 regions of England and Wales seeing declines from August to September.