Wednesday 14 August 2019 10:33 am

London house prices continue to slide under Brexit pressure

London house prices have continued their slide with a year-on-year fall of 2.7 per cent in June, figures from the Office for National Statistics (ONS) showed today.

Read more: London house prices suffer worst plunge in 10 years

The figure marked a slowdown from the 3.1 per cent drop seen in May, however, which was the biggest fall since the financial crisis.

Average house prices in London have now been falling over the year for 16 straight months – each month since March 2018.

The capital had the lowest growth out of any region in the UK. Average house prices in the rest of the country increased by 0.9 per cent in the year to June.

House prices in the UK have cooled in the past three years, driven by a slowdown in the south and south east of England.

Yet Brexit uncertainty has put people off making big-ticket purchases until they can be more sure of the economic and political outlook. 

Assistant head of inflation at the ONS, Chris Jenkins, said: “Overall house prices growth was unchanged from May, but in London annual growth was negative once again, decreasing for the 16th month in succession.” 

“House price growth was strongest in Wales with the increase in England driven by the Midlands.”

Howard Archer, chief economic adviser to the EY Item Club, said: “With Brexit due to occur on 31 October – and it’s currently very unclear what will happen then – uncertainty will weigh down on the economy over the next few months at least and hamper the housing market.”

“Consumers may well be particularly cautious about committing to buying a house, especially as house prices are relatively expensive relative to incomes.”

Although London prices houses are falling, the area remains the most expensive place to buy a property at an average of £467,000.

This is followed by the south east at £323,000 and compares to the north east average of £130,000.

Read more: UK house prices suffer surprise July fall as UK market ‘treads water’

Paul Stockwell, chief commercial officer of Gatehouse Bank, said that despite the falling prices in London, “these are not significant enough declines to make a difference for would-be buyers who cannot afford to get a foot on the property ladder or upsize to another home”.

(Image credit: Getty)