Home prices in seven of London’s eight most-expensive neighborhoods fell in June as the number of properties bought with cash dropped, Acadametrics Ltd. said.
Homes in the City of London financial district had the biggest decrease, falling 2.5 percent, the real estate researcher and LSL Property Services Plc said in a report today. That was followed by the City of Westminster, which includes the affluent Mayfair area, where prices fell 2.4 percent from a month earlier.
“There would appear to be a slackening in the pace of change in the higher-priced areas of London,” Acadametrics Chairman Peter Williams said in the report. “A fall of prices in central London could bring about a decline in the market’s expectations of the future movement of prices for the remainder of the country.”
Foreign investors and a weakened pound have fueled demand for luxury homes in London. Prices in the City and in Westminster rose 68.4 percent and 18.1 percent, respectively, in the 12 months through June, according to the report. Prices in all of London’s 33 boroughs rose 7.1 percent for the year. Prices in central London “have been increasing to what can only be described as ‘eye watering’ levels,” Williams said.
The city’s most-expensive borough, Kensington & Chelsea, was the only one of the eight districts where home prices rose in June, gaining 2.7 percent to an average of 1.53 million pounds ($2.4 million).
“The prime areas of London have been booming ahead, but more recently they’ve come off the boil a little bit, probably because the price rises in the past have been so great,” said Matthew Pointon, a property economist at research firm Capital Economics Ltd. “The Kensingtons and Westminsters are going to underperform a little bit compared with the rest of London due to the fact that they’re so highly valued.”
The average value of homes in Greater London reached a record of 451,422 pounds last month, according to the report. That drove U.K. house prices to a new record in July as residential real estate transactions reached the highest in four years amid improving confidence, London-based Acadametrics said.