London’s home prices fell year-to-year in March for the first time since 2009, according to a report by the Office for National Statistics on Wednesday.
The average house price in the capital dropped to £472,000 (US$628,919), representing a 0.7% decrease year-over-year. It was also the worst annual growth rate since 2009, when home prices posted a 3.2% decrease.
The city’s housing market has been slowing since mid-2016, due to increases in taxes and regulation, as well as the Brexit vote, said Kishan Rana, an economist at the Office for National Statistics, in a news release.
“Reforms to Stamp Duty Land Tax, along with reductions in mortgage interest relief, have contributed to an increase in price particularly for second-home buyers,” he said.
U.K.’s vote to leave the European Union in mid-2016 might have deterred foreign buyers, who often view London as one of the top destinations for property investment.
“With the referendum and subsequent uncertainty regarding Britain’s political and economic environment, perceptions of the future value of London property have been adversely affected,” Mr. Rana said.
Meanwhile, domestic buyers have turned away from London in favor of more affordable U.K. cities, such as Manchester, Liverpool and Birmingham, which have all seen significant price increases during the same period of time.
Overall, the House Price Index for the U.K. as a whole grew 4.2% year-over-year to £224,144 (US$298,662) in March, maintaining the steady pace of 4%-5% in recent months, according to the Office for National Statistics, pulling data from land registries in England, Scotland and Northern Island.
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