The average price of London property has dropped by nearly £10,000 since this time last year, just as the rest of the country hits a record high.
Properties in the capital are now coming to market 1.5 per cent (£9,423) cheaper than a year ago, the biggest fall since May 2009 according to Rightmove’s latest house price index.
But the decline is almost entirely due to a rapid drop in the price of high-end properties and those in inner London, with the rest of the market showing resilience.
Houses with five bedrooms or more in London took the biggest hit. The annual decline averaged at 7.3 per cent, while a dramatic monthly fall of 11.9 per cent in April brought the average price of properties at the top of the ladder down to £1.49m from £1.69m in March.
The overall average asking price of a property in London is now £649,772, which is £10,000 below the all-time high.
The bottom and middle price sectors showed greater resilience. Prices for first-time buyer properties with two bedrooms or fewer went up 1.3 per cent this month and middle market homes slipped marginally by 0.7 per cent.
Inner London properties saw a year-on-year price drop of 4.2 per cent (£35,504). Outer London prices were up 1.7 per cent (£9,017), in line with a national increase of 2.2 per cent.
Every region in the UK saw an increase this month except for London. Miles Shipside, Rightmove director and housing market analyst, said: “The more discretionary upper end of the market is having to tempt buyers with cheaper asking prices, off-setting the higher purchase taxes in this sector.”
He added: “Demand continues to be strong, but at the right price for the right property.”
Meanwhile the first-time buyer sector drove national growth, as an annual increase of 6.5 per cent in the sector put the average price for a house with two beds or fewer at a new record of £194,881. The average price across the country rose by 1.1 per cent (£3,547) to £313,655 this month, setting another record as it exceeded previous high of £310,471 set in June 2016.
Rightmove’s findings concluded that the upcoming snap election was unlikely to have a significant effect on the market. Shipman said: “any slowdown in activity will be counterbalanced by the market’s current fast pace. Indeed, in locations where choice of suitable property is limited hesitation could mean losing out to others who still decide to act.”