Some of the capital’s most expensive residential areas saw house prices drop sharply this month, according to data released today, with high demand supporting the lower end of the market.
In Kensington and Chelsea, London’s most expensive borough to buy in, prices dropped 7.2 per cent from June to July, according to Rightmove.
It comes despite year-on-year growth of 9.7 per cent after prices surged during the second half of last year.
Similarly sharp monthly declines were seen in other high-end areas such as Camden, where the average house price exceeds £1m, and Richmond upon Thames, where the average price is £825,497.
“Top-end sellers have a propensity to prioritise the more certain excitement of summer holidays over the potential excitement or perhaps disruption of putting their property up for sale at this time of year,” said Rightmove director Miles Shipside.
“The fall in inner London is also a likely reflection of the slower market in more expensive areas, with demand moving to outer London boroughs with more affordable prices.”
Falls at the top of the market contrast with buoyant prices at the bottom. Prices in Greenwich and Lambeth shot up 7.9 per cent and 7.8 per cent respectively from June to July. Average prices there are £427,976 and £661, 335.
Average prices in the top five performing boroughs were all below £614,000.
In comparison, in the five worst performing boroughs the average prices were all above £618,000.
“Stretched affordability is acute in nearly all market sectors in London, but the lower-end sector with up to two bedrooms has high demand from first-time buyers, down-sizers and investors,” Shipside said.
“It looks like demand remains strong for properties in the two-bedrooms-or-fewer sector, with the urgent need for a roof over your head bucking the summer slowdown.”
The extra demand from first-time buyers is also seen in typical first-time buyer properties — anything with two bedrooms or less.
Such properties climbed 1.1 per cent on the month and are currently 6.3 per cent higher than they were last year.
Larger property prices stalled on the month, while those at the top dropped, but both sets have risen in price more strongly over the last 12 months than first-time buyer properties.
Across London as a whole prices are up 0.2 per cent on the month and 7.8 per cent on the year.