Mansion Global

London Sees Sharpest Property Price Drops Since 2011

Though most parts of the U.K. saw rises in prices, the capital lagged behind, according to IHS Markit and Halifax

Save

Tower Bridge, London

Laurie Noble/Getty Images
Tower Bridge, London
Laurie Noble/Getty Images

Property prices in London logged their sharpest falls in the first three months of this year since the start of 2011, according to Thursday’s regional price index from financial services company IHS Markit and U.K. bank and mortgage lender Halifax.

Though most regions and countries across the U.K. registered annual price inflation in residential real estate, London saw a 3.8% fall in prices compared to the same time frame last year, the report said.  

More:German Prefab House in English Countryside Lists for £4.5 Million

Prices in the neighboring region of South East England performed marginally better but remained almost flat, increasing 0.3%, while a little further afield, property prices in the South West saw rises of just 1.9%.

But it was the East Midlands and East Anglia that had the highest price rises, up 7.3% and 7.2% respectively, followed by Scotland (6.7%) and Yorkshire & Humberside (6.1%).

London failed to fare any better in the short-term as prices fell 3.2% from the previous quarter, the largest quarterly decline in prices in nine years, according to the report.

The North West was right behind the capital, logging house price falls of 3%, while there was a fall of 1.5% in the South East and a decline of 1.1% in the South West since the tail-end of last year.

From Penta:Easing Through the Northwest Passage

The North of England saw its prices rise the most, up 4.5% since last quarter, followed by East Anglia and the East Midlands, where prices increased 2.2% and 1.8% respectively.

"The subdued performance of the U.K. housing market, especially in the South of England, seems to reflect a general lack of appetite amongst households at present for activity related to major purchases in line with the general squeeze on real incomes seen in recent months," said Paul Smith, economics director at IHS Markit, in the report.

"Allied with a general undercurrent of Brexit-related uncertainty, plus the likelihood of higher (albeit still historically low) interest rates later in the year, the market seems set to persist in a subdued state for the foreseeable future," he added.

Despite their poor markets, London and the South East remain the priciest regions in which to buy property in the U.K.. In the first quarter of 2018, the average house price in London was £430,749 (US$613,602), the lowest since the end of 2015. In the South East, prices averaged £337,776 (US$481,162) a one-year low, the report said.

The U.K.’s average property price is £223,819 (US$318,830).