House prices in the capital fell further in August, according to the government’s latest house price index, as higher interest rates continued to weigh on the market.
Data released by the Office for National Statistics on Wednesday showed the region’s house prices fell by 1.4 per cent in August year-on-year.
London’s average house prices remained the most expensive of any region in the UK, with a figure of £536,000, down from £553,000 last August.
Meanwhile, nationwide house prices rose by 0.2 per cent in the 12 months to August, down from 0.7 per cent in July.
The average price increased to £291,000, which is little changed from last August but £9,000 more than the recent low point in March.
Prices in London have fallen 4.8 per cent over the last year, the biggest decrease of any region in cash terms at an average of £26,514, according to the Halifax House Price Index.
“These numbers reflect what was happening in August, and while we would expect a lull in the summer months with low activity, we’ve found that the housing market is not as exciting this autumn as it was in the spring,” said Alex Lyle, director of Richmond estate agency Antony Roberts.
“Buyers are waiting to see what happens with mortgages and if interest rates are held again next month, it will be viewed as a little pigeon step in the right direction.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “Swap rates, which underpin the pricing of fixed-rate mortgages, have risen on the back of the latest inflation data, with five-year Swaps rising to 4.68 per cent this morning from 4.57 per cent yesterday.
“While another base rate rise could still be on the cards, it is looking as though it is close to its peak, which will be welcomed for hard-pressed borrowers, with lenders continuing to reduce their fixed-rate mortgage pricing.
“There is a strong argument for the Bank of England to hold rates again next month in order to let the dust settle and the full effect of so many increases to filter through.”
The National Association Of Property Buyers warned today that house prices could keep falling for at least the next six months, with spokesman Jonathan Rolande expecting to see around 0.5% come off prices each month.