Biggest quarterly fall in London house prices for nine years recorded

House prices in London declined at their sharpest rate for nine years during the first part of 2018, new data shows.

Prices fell by 3.2 per cent in the first three months of the year according to the Halifax House Price Index.

The average London house price was £430,759, its lowest since the end of 2015.

On an annual basis, London saw a 3.8 per cent reduction, the worst drop since 2011.

Most regions continued to show house price growth, but the South East was sluggish with an annual rise of just 0.3 per cent.

Overall growth was 2.8 per cent on this time last year, which was well below the higher rates seen in the last five years.

Leading growth was the East Midlands, where prices are up 7.3 per cent in a year, while East Anglia saw a 7.2 per cent rise.

But London was still far and away the most expensive place to buy, while the North of England has the lowest prices.

“The subdued performance of the UK housing market, especially in the South of England, seems to reflect a general lack of appetite amongst households at present for activity related to major purchases in line with the general squeeze on real incomes seen in recent months,” said Paul Smith, economics director at IHS Markit.

“Allied with a general undercurrent of Brexit-related uncertainty, plus the likelihood of higher (albeit still historically low) interest rates later in the year, the market seems set to persist in a subdued state for the foreseeable future.”

This chimed with research released yesterday by RICS, which showed that buyer demand fell for the eleventh month on the trot.