London asking prices have gone up 10 per cent in the last year, yet some experts are warning the market could run out of steam in 2016.
Prices are down 0.5 per cent compared with last month, according to figures published by property website Rightmove this morning. The smallest December dip since 2008 took asking price growth to 9.9 per cent annually. It is faster than November’s annual rate of growth of 8.1 per cent.
“Whilst a fall is the norm at this time of year, this is December’s best price performance in the capital since 2008,” said Rightmove director Miles Shipside.
The biggest monthly rises in new seller asking prices were in Camden at 15.3 per cent. The steepest decline was in the City of Westminster where prices were down 8.5 per cent on the month.
Yet Rightmove believes the London market will run out of steam in 2016 and is predicting a three per cent climb in asking prices over the next 12 months. Asking prices for homes in inner London will fail to register any growth next year, Rightmove said. It puts the stall in house price growth down to stretched affordability.
“The most buoyant sector in London overall is the one made up of first-time-buyer type properties (two beds or fewer), up by 11 per cent annually. It’s the harbinger of another round of price rises in typically more affordable Outer London next year, which means continued struggles for those whose affordability constraints have ruled them out of the market in 2015,” said Shipside.
Prices at the top of the ladder have risen the least over the last 12 months, with prices for five-bedroom homes and four-bedroom semi-detached homes increasing 5.6 per cent.
Asking prices tend to rise at faster rate than other measures of house prices. Figures from the Office for National Statistics showed prices in London were 7.2 per cent higher in September than in the same month last year.