London property prices saw their first fall in eight years, according to the latest house price index from the Nationwide Building Society.
London property prices were down 0.5 per cent during 2018, a rare decline. In contrast, across the UK, property prices were up by 2.6 per cent. However, this was a relatively modest increase in comparison to the 4.5 per cent recorded during 2016. This national slowdown was not reflected regionally however. Although property prices fell in the capital, the West Midlands saw a 5.2 per cent rise over the last year. This is a significant rise in comparison to the 4.1 per cent growth noted in 2016.
The South West, the East Midlands and the North West all also recorded property prices gains of at least 4 per cent.
At the other end of the scale, East Anglia was the region with the biggest slowdown. In 2016 property prices were up 10.1 per cent in the region. In 2017 the increase was just 2.3 per cent.
Nationwide’s chief economist Robert Gardner commented on the results: ‘Low mortgage rates and healthy employment growth continued to support demand in 2017, while supply constraints provided support for house prices. However this was offset by mounting pressure on household incomes, which exerted an increasing drag on consumer confidence as the year progressed. The impact of previous policy changes meant that demand from buy-to-let investors remained subdued in 2017. The significant disparity in house prices across the UK has been a recurring theme in recent years. In this respect 2017 saw the beginnings of a shift as rates of house price growth in the south of England moderated towards those prevailing in the rest of the country.’
Garrington Property Finders managing director Jonathon Hopper added: ‘For the first time in nearly a decade, the North-South divide has been reversed. London’s sliding prices held back southern England as a whole, and allowed price growth in the North to come out on top. But disappointing as it may have been for Southern sellers, the property market needed a topsy-turvy year to regain some equilibrium. The years of double-digit price growth in London’s hottest postcodes were always going to be unsustainable, and 2017’s modest fall in prices in the capital has injected a valuable reality check.’