London house prices dropped in 2017: This is how the experts reacted

 
Caitlin Morrison
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Changes In Stamp Duty Expected To Help Millions Of Home Buyers
London house prices fell for the first time since 2009 last year (Source: Getty)

London house prices fell last year for the first time since the financial crisis, and the capital was the worst performing UK region for property price growth for the first time in 13 years.

House prices in the capital dropped by 0.5 per cent in 2017, according to the most recent Nationwide house price index, against a 2.6 per cent annual increase across the UK as a whole.

This is how the experts reacted to London's poor performance:

Inevitable

"The years of double-digit price growth in London’s hottest postcodes were always going to be unsustainable, and 2017’s modest fall in prices in the capital has injected a valuable reality check," said Jonathan Hopper, managing director of Garrington Property Finders.

"On the front line we’re seeing a flight of equity from London as many domestic buyers look for better value elsewhere, but the weak Pound and softening prices in the capital’s premier postcodes continues to attract the interest of opportunistic international buyers.

"In many regions the market ended 2017 with a spring in its step, recovering the momentum it lost in the wake of the inconclusive election result. The early signs are that this renewed sense of purpose is continuing into 2018, with those who have resolved to buy pressing ahead despite political and economic headwinds.

"As long as we don't see any shock events this year, such as a change of government or a derailing of Brexit negotiations, there is every reason to believe that movers are accepting a new reality and will keep calm and carry on in 2018."

A gift for first-time buyers

"The first fall in prices in the capital for eight years was an early Christmas present for first-time buyers, as affordability and Brexit remain major issues," said Ewen Bunting, head of sales at independent estate agents James Pendleton.

"A generation of house buyers will never have witnessed places like the West Midlands becoming property hotspots while London struggles. Strong employment, a lack of property for sale and low interest rates continue to support prices across the country while the capital is unlikely to respond to the chancellor’s scrapping of stamp duty for first-time buyers.

"This year all eyes will be on whether the regions follow the capital’s lead or come to realise a semi-detached economic reality all of their own, as prices outside London have not risen as sharply."

Heading into the unknown

"The major surprise during 2017 was undoubtedly the slowdown in London house prices. It's been 13 years since the capital sat at the bottom of the house price growth table, and since then we have seen prices surge to unprecedented and unaffordable levels," said Alex Gosling, founder of online estate agents HouseSimple.com.

"Fortunately, there's no longer the reliance on the London market to prop up the rest of the country. Growing regional business hubs have seen other major UK cities prosper, while London has suffered as property prices have become unaffordable for the majority.

"Looking ahead to 2018, we are entering the unknown. Historically, you would expect activity in the housing market to pick up in the first quarter of the year. But with Brexit looming in 2019, it's difficult to gauge how buyers and sellers will react."

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