London House Prices Are Having Their Worst December in Yearsby
Weakness in housing market led by prime areas of the capital
Rightmove forecasts declines will continue into 2017
London home prices are having their worst December in six years, led by weakness in prime areas in the capital that is likely persist into 2017.
Rightmove said on Monday that asking prices fell 4.3 percent from November to 616,160 pounds ($775,500), with inner London dropping 6 percent. The property website operator said the bubble in prime London “continues to deflate,” and it sees prices there declining 5 percent next year.
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“Alongside the seasonal slowdown, the readjustment of prices to match buyers’ greater reticence continues, especially in more expensive inner London,” said Rightmove Director Miles Shipside. “Buyers are being put off the really big-ticket purchases.”
In a sign of the disparity within the city, average prices in inner London are down 2.6 percent over the past year, whereas outer areas are up 2.7 percent. That left average prices across the capital little changed. The split partly reflects the luxury end of the market, where an April tax increase on property investors and worries about Brexit are sapping demand.
Rightmove’s report also showed demand in London -- as measured by sales agreements -- was down 7.2 percent in November from a year earlier. Nationally, asking prices fell 2.1 percent in December from the previous month, in line with the seasonal average, and were up 3.4 percent from a year earlier. In contrast to London, Rightmove expects national prices to increase for a seventh consecutive year in 2017, forecasting a 2 percent advance.
In a separate release on Monday, LSL and Acadata said annual U.K. house-price inflation slowed for an eighth month in November to 3.1 percent. The report also echoed Rightmove, showing London values have, on average, barely moved in the past year. It blamed that on a “significant drop in prices and transactions in prime central property.”