London's housing market is at its weakest since 2008, say estate agents

Emma Haslett
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General Aerial Views Across London
House prices in the capital were in negative territory, said estate agents (Source: Getty)

London's housing market has posted the weakest growth since the depths of the financial crisis, estate agents said today.

In a closely-watched survey of estate agents' sentiments by the Royal Institution of Chartered Surveyors (RICS), some 56 per cent more respondents said they had observed a fall in house prices in the capital in August - the highest negative result since 2008.

The survey also found estate agents expect prices in London to fall over the next 12 months, the only part of the UK where 12-month expectations are negative.

That backs up official figures published earlier this week, which showed house price growth in the capital had tailed off in July.

Read more: Every London borough ranked by house price reductions

However, a fall in the number of homes going on sale tailed off in the month, with estate agents reporting an increase in new instructions in so-called prime central London - the capital's most exclusive areas - with new instructions in July and August rising to their highest since January 2016.

Across the rest of the UK, sentiment was more positive, with growth expected across Northern Ireland, the North West, Scotland and the South West, although house price growth was expected to be "modestly negative" in the South East, the North and East Anglia.

Read more: How the Help to Buy scheme is distorting the London housing market

Landlord exodus

The report also suggested landlords are actively leaving the market, with 61 per cent of respondents saying they believed more landlords will exit the housing market, while only 12 per cent said there will be an increase.

“The latest results continue to suggest that the greatest pressure on both prices and activity continues to be felt in prime central London market," said Simon Rubinsohn, chief economist at the RICS.

"Although there are some signs that the wider South East is also losing some momentum, anecdotal evidence suggests the impact is very location specific. Meanwhile the numbers for most other parts of the country point to a rather more resilient marketplace."

Read more: The London areas where property prices have increased the most since 2009

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