London houses withstand UK asking price collapse

Ben Southwood
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LONDON’S resilient housing market defied a UK-wide fall in asking prices going into November, data revealed this morning, driven by the top end of the market.

The UK’s average property asking prices fell 2.6 per cent in just a month to hit £236,761, according to the Rightmove house price index, a sharp turnaround from the monthly growth of some 3.5 per cent seen going into October.

But even this rapid decline wasn’t enough to erase the rest of the year’s growth. Prices were still up two per cent compared to November last year – actually bringing up the annual increase from last month, showing that last November saw an even sharper fall.

Though London prices also saw a sharp fall in the rate of monthly growth – from 4.8 per cent in October to 1.2 per cent in November – the continued growth was testament to the robust strength of the capital’s market, even in spite of difficult underlying economic trends across the world.

“This month sees a modest increase by London standards,” said Miles Shipside at Rightmove, “though that is something of an achievement given that new sellers in the capital haven’t raised prices in November since 2007.”

This contrasts with the national market as a whole which Shipside called “patchy” – putting the yearly rise mainly down to “a buoyant London market.”

“There’s a two-speed market, with sellers in the capital seeing near double-digit price growth in a year whilst the average for everywhere else remains broadly flat.”

Despite this weakness across the country, homeowners are broadly optimistic that the coming 12 months will see prices increase, according to a survey from Countrywide and YouGov out today.

Some 77 per cent of UK homeowners believe their home will either increase in value or hold its worth over the next 12 months, the data showed.

And the survey also gave reason for optimism about the state of the mortgage market. Nearly a third of UK adults who were unsuccessful when applying for a mortgage from a bank were able to secure the required credit from a broker.