House prices in wealthy London boroughs fall by up to £300,000
House prices in London’s most sought-after areas plummeted further in June, with the average price in some postcodes falling by nearly £300,000 year on year.
London’s average house price slipped by 2.5 per cent to £554,000 in the year to June, according to the Office for National Statistics (ONS).
Though this was a softer fall than May’s 3.1 per cent, prices in some of London’s most up-market areas suffered far bigger drops.
The average house price in the borough of Westminster – which includes luxury postcodes like Mayfair, Belgravia and St John’s Wood – fell by 25.4 per cent to £854,000 in the year to June.
This marks a drop of £291,000 in only a year. In Kensington and Chelsea, the average house price slipped by 14.7 per cent to £1,250,000.
In Hammersmith and Fulham, house prices fell by 13.3 per cent to £726,000, while Camden saw a 7.1 per cent drop to £833,000.
London’s 2.5 per cent drop in prices marks the tenth consecutive month in which value has been stripped from the capital’s housing market.
The rest of the UK has seen modest growth in recent months, though this slowed in June. The average house price across the country grew by two per cent to £272,000, down from May’s three per cent growth rate.
London housing market ‘more sensitive’
Property experts have said that the higher mortgage rates caused by the Iran war have weighed on London’s property market, on top of the disproportionately high stamp duty paid by homebuyers in the capital.
But Paige Tao, an economist at PwC, said: “London’s underperformance is more than the mortgage rate story.
“High starting valuations, higher transaction costs and greater sensitivity to international demand mean the capital is having to adjust more than most regions.”
Jonathan Hopper, chief executive of property portal Garrington, said that London’s £9,000 month-by-month growth in house values suggests that prices may have “finally bottomed out”.
“While one month of Land Registry data does not a summer make, we may have reached a tipping point as tactical buyers who’d been waiting for the right moment to strike return to the London market,” he said.
Property advisers Knight Frank said that rising inflation and pre-Budget speculation over potential tax hikes is expected to keep a lid on prices until the end of the year.
Tom Bill, the firm’s head of UK residential research, said: “A seasonal bounce in activity may be more detectable in autumn than it was in spring as rates stabilise, but that will also depend on the extent of any pre-Budget speculation and overall we expect prices to be largely flat this year.”