London house prices dropped by almost £1,000 this month, according to figures from Rightmove, but prices rose nationwide

Mark Sands
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Is London's housing market about to become a lot more affordable? Probably not (Source: Getty)

London house prices have dropped by almost £1,000 this month, according to the latest figures from Rightmove.

The firm's regular House Price Index showed a drop of £971 in the average price of a London home, equivalent to 0.2 per cent.

By contrast, the national average showed a rise of 0.8 per cent, or £2,320.

The firm estimated the average Greater London property price in June was at £643,117, while the national average was £310,471.

Read More: One in five London homes is for sale at £1m or more

Rightmove director and housing market analyst Miles Shipside noted that property prices in London have grown by almost 55 per cent since June 2010, compared to 24 per cent in the rest of the country.

“We’ve become accustomed to prices rising in London and now that the pace of rises has slackened it’s easy to forget that the price of property coming to market is still £228,632 higher than it was six years ago,” he said.

“Buyers either have physical limits to what they can afford or mental limits to what they are prepared to pay, and this month Londoners are at odds with the rest of the country.”

And Shipside added that changes to rules around stamp duty, the introduction of levies for company and offshore purchasers, and additional taxes on second homes have acted as a disincentive.

“Some sellers have dropped their prices to suit, but buyer momentum has been lost, and even those with access to considerable funds are still being deterred,” Shipside said. "This is also due to the tax regime changing the dynamics and motivation to purchase, with renting high-end properties now being considered by some as a more cost-effective option.”

Read More: Surprise: Asking prices have reached a record high (again)

Finally, he added that while nationwide prices have continued to grow, uncertainty around the EU referendum is likely to be greatest in London as the favoured destination of international buyers.

Rupert Briggs, estate agent at The Personal Agent in Surrey, said: “The market is still very strong in our areas and we have more buyers than sellers.

“The market is definitely a lot more price sensitive, and properties need to be marketed at the correct price to achieve a good level of interest. There is a little uncertainty regarding Brexit but in general it has not affected the market in our areas.”