London property market continues to cool as UK average asking price reaches a record high

Despite positive growth elsewhere, London’s own housing woes appear to be continuing into Spring.
Despite positive growth elsewhere, London’s own housing woes appear to be continuing into Spring. (Source: Getty)

The average price of property coming to the London market fell this month as the UK average price reached a record high, according to Rightmove's house price index. The capital is just one of two regions to see a drop nationally, with prices decreasing by 0.6 per cent this month.

The national average asking price for properties seeing their first time on the market has now hit a new record of £305,702, representing a strong interest in property across the UK. It comes after the previous record was set in July 2017 at £304,943, with this month’s figures beating it by 0.3 per cent and a further six out of eleven UK regions hitting new individual highs.

“Home buyers are seeing average asking prices at their highest ever level with upwards price pressure getting stronger the further away you move from London,” said Miles Shipside, Rightmove director and co-founder.

Read more: The British towns with the highest growth in house prices so far this year

However, it’s not all good news. Shipside continued: “Higher prices stretch buyers’ willingness to pay or ability to afford them. This month’s increase of 0.4 per cent is the lowest at this time of year since 2008, though the subdued figure could partly be a re-balancing from the seasonally large 1.5 per cent rise the previous month.”

The north west proved to hold the strongest regional growth, seeing an annual rate of price increase of 4.3 per cent. The east midlands, Yorkshire and the Humber, the south west and Wales also all found themselves on the list.

Yet despite positive growth elsewhere, London’s own housing woes appear to be continuing into Spring. Sellers in the capital are currently achieving just 95.6 per cent of their final asking prices, which translates into a loss of £27,442 based on the average London asking price of £628,039. When compared to the national average loss of £10,000, or 96.7 per cent of the final asking price, it appears that any hopes for an upcoming end to London’s property downturn might be dashed.

Read more: London property sale prices fall as rental values slump

“The difference between asking and sold price proves just how many houses have been priced badly recently and that always happens when we see a shift from a sellers’ to a buyers’ market in London,” said Lucy Pendleton, co-founder and director of independent estate agent James Pendleton. “Many sellers could have improved the amount paid for their homes if they had encouraged more viewings on day one, rather than going for gold with an over-ambitious ticket price. Being in denial about this means you will only deny yourself the best possible price for your property.”

Among the London boroughs, Richmond upon Thames and Islington saw the highest monthly change in their average asking prices, increasing 1.9 per cent and 1.6 per cent respectively over the past three months. On the other hand, Kensington and Chelsea saw the most significant rate decrease at -1.4 percent, with Southwark falling just behind at -1.3 per cent.

Brian Murphy, head of lending for Mortgage Advice Bureau, believes the national price rise is unsurprising when held up against the context of London’s own cooling market: “Across the rest of the UK, the average completion price achieved versus asking price would appear to have increased in the last four years, whereas in the Capital the same metric would appear to be in negative territory.

“Certainly, it would seem that this is a continuation of what we observed the previous month, and until such times as we see a significant uptick in terms of more properties coming onto the market in areas of high demand, it’s likely to be ‘more of same’ next month too.”

Read more: Nearly half of prime London property is now selling for below asking price

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