London House Prices Decline in Stark Division With Rest of UK

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Home prices in London are continuing to fall, prolonging a slump that’s seen the average property in the capital lose almost 2 percent its value over the past year, surveys Monday showed.

The U.K. market is “starkly divided,” according to Acadata, which said that values in London slid for a third month in February but are rising in other regions apart from the southeast. A similar picture emerged in figures from property-website operator Rightmove, with average prices climbing to a new record of 305,732 pounds ($436,000) in April, despite a drop in London.

London Effect

House prices in the capital are declining more than at the national level

Source: Acadata

“Home buyers are seeing average asking prices at their highest ever level with upwards price pressure getting stronger the further away you move from London,” said Rightmove Director Miles Shipside. “However, higher prices stretch buyers’ willingness to pay or ability to afford them.”

Years of rampant home-price inflation and a shortage of properties for sale has pushed ownership out of reach for many, with Acadata saying that six regions set new price records recently. Transactions were 19 percent lower than usual for this time of year, which can be partly explained by changes in stamp duty.

House prices across the country rose just 0.4 percent in April from a month earlier, the lowest at this time of year since 2008, the Rightmove report showed. They fell 0.6 percent in London, where the average property is now over 10,000 pounds lower than a year ago.

Uncertainty surrounding Britain’s exit from the European Union has weighed especially on the London housing market. The declines are no longer concentrated in the most expensive areas of the capital, the Acadata report showed.

Greater London might have shown an annual fall of 3.4% were it not for the sale of seven properties in Kensington and Chelsea in February 2018, all with a sale price in excess of £10 million, Acadata said.

— With assistance by Lucy Meakin

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