May 13 (Bloomberg) -- London's property market had the most widespread price declines in at least 14 years last month as the slump in financial services deepened and banks curbed lending, the Royal Institution of Chartered Surveyors said.

The number of residential property agents and surveyors saying prices fell in the capital exceeded those reporting gains by 94 percentage points in April, the lowest since records began in 1994, the group said today. The reading for the whole country fell to minus 95.1, the least since the series began in 1978.

The U.K. capital has ``caught up with the rest of the country,'' Simon Rubinsohn, chief economist at the London-based surveyors' group, said in an interview on Bloomberg Television. ``There has been a sea change, and it's not wholly surprising given the impact of the financial-services industry.''

London banks will cut 10,000 jobs by 2011 after losses from credit-market turmoil climbed above $329 billion, an Experian Group Ltd. report last week showed. Banks raised the cost of their most popular mortgages to the highest in eight years last month, making home purchases harder to finance, instead of passing on the Bank of England's three interest-rate cuts since December.

Apart from Scotland, where prices rose, every region tracked by RICS showed declines. In London, a measure of the outlook for prices fell to minus 66 from minus 57 in March.

`Confidence Is Low'

``The economy is having a greater effect on the property market, causing prices to drop and activity levels to remain at a minimum,'' said Richard Cotton, a real-estate agent at Cluttons in the London districts of Kensington & Chelsea and Belgravia. ``Buyer confidence is low.''

London will bear the brunt of 40,000 job losses in U.K. financial services in the next three years, a report by Experian, the world's largest credit-checking company, showed May 9. The capital's banking district, known as the City, employed 353,000 people in 2007, data from the Centre for Economics and Business Research show.

HBOS Plc, the country's biggest mortgage lender, said May 2 property values fell from a year earlier for the first time since 1996 as banks curbed lending after the collapse of the U.S. subprime mortgage market.

The cost of borrowing for homebuyers with a 5 percent deposit, fixed for 24 months, rose to 6.94 percent in April, the highest since February 2000, the central bank said yesterday.

Retail Sales

Revenue at shops open at least a year fell from a year earlier for a second month in April, dropping 1.5 percent, the British Retail Consortium said today. The group, representing 80 percent of stores, conducted its survey from April 6 to May 3.

``Higher fuel and utility bills'' are ``eating away at people's spare cash,'' Stephen Robertson, director general of the BRC, said in the statement. ``With the economic fundamentals remaining weak, there seems no reason for these tough trading conditions to improve soon.''

Oil prices rose above $126 per barrel for the first time last week. Centrica Plc, Britain's biggest energy supplier, said yesterday it may raise household natural gas and power prices for a second time this year on ``stubbornly high'' fuel costs.

Inflation probably accelerated in April to 2.6 percent, the highest in a year, according to the median forecast of 36 economists in a Bloomberg News survey. The Office for National Statistics will publish the data at 9:30 a.m. in London.

Faster inflation may limit the Bank of England's scope to lower the benchmark interest rate further from the current level of 5 percent to nurture economic growth. The International Monetary Fund forecasts U.K. expansion of 1.6 percent in 2008, the least since the end of the last recession 16 years ago.

To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net

Last Updated: May 12, 2008 19:01 EDT