This is how far London house prices fell in the third quarter

Helen Cahill
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House prices in London have been disproportionately affected by the Brexit vote (Source: Getty)

London's house prices have underperformed in the third quarter as the capital recovered from the shock of the Brexit vote and the uncertainty afterwards.

House prices fell 2.5 per cent in the third quarter, following on from a 0.5 per cent fall in the second quarter, according to data from Halifax and IHS Markit. London's decline compared to a quarterly fall of 0.5 per cent for the UK.

Read more: This is how sterling's unstoppable slide will affect UK house prices

The only other region with two consecutive quarterly declines in house prices was Scotland.

On a year-on-year comparison, however, London's house prices still performed well, increasing by 7.9 per cent. In the UK as a whole, house prices increased 5.7 per cent annually.

The average house price in London is now £443,880, more than double the UK average of £214,140.

But, according to Hamptons International, a family looking for a detached home in London will now have to fork out a lot more. The average price for a detached home is now above £1m for the first time, a figure which is dragged up by sky-high prices in inner London.

Chris Williamson, chief business economist at IHS Markit, said: "The UK's vote to leave the EU has been accompanied by a clear cooling of the housing market.

"Sentiment among homeowners regarding property values slumped in July but has since rallied somewhat though remains weaker than at any time since the height of the eurozone debt crisis in 2012."

House prices after Brexit: a short history

  1. In June, RICS predicted house prices would drop for the first time since 2012
  2. Rightmove report house prices fell by 0.2 per cent in June
  3. Brexit vote, everyone wants to know what will happen to house prices, so we asked the experts
  4. FTSE 100-listed housebuilder shares take a tumble
  5. Data from Halifax shows house prices fell after the Brexit vote
  6. Mortgage approvals fell to an 18-month low in July
  7. Nationwide reports house prices went up again in August
  8. Rightmove reports house prices rebounded in September after the Brexit vote