London house prices have now dropped for eight quarters in a row, the latest house price index from lender the Nationwide has revealed, although prices outside the Capital and the home counties are continuing to rise at a modest pace.
Prices in London dropped by 0.7% during June taking its annual tally to -3.8% although price reductions are slowing, the Nationwide says.
Many agents are claiming that the market had begun to recover from the Brexit effect during April and May after the March 29 political deadline passed, but that the resignation of Theresa May and the possibility of a no-deal Brexit have dented sentiment again.
“Political and economic uncertainty has weighed on London and the South East more heavily than other regions which, along with high buying costs and affordability constraints, has made the capital’s housing market extremely price sensitive,” says Iain Mckenzie (left), Chief Executive of the Guild of Property Professionals.
“The outcome is that buyers are now self-regulating in terms of price, and this has resulted in the London market finally re-aligning to what buyers are prepared to pay, meaning those properties priced sensibly are selling quickly.”
Elsewhere in England, annual price growth remained relatively modest in the second quarter of the year, with Yorkshire & Humberside the best performing region with a 3% year-on-year rise.
“While many remain sceptical about the current direction of the UK housing market, it seems as if the latest figures from Nationwide suggest that while we may be travelling at a different rate of knots, we are at least doing so in the same direction,” says Marc von Grundherr of London agency Benham & Reeves.