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Property prices in London saw their most significant decline in nine years during the first part of 2018.
New data from the Halifax House Price Index has found that London prices suffered the significant decline at the start of 2018. Prices were down by 3.2 per cent during the first three months of the year. The average London house price stood at £430,759. This marks its lowest point since the end of 2015.
On an annual basis, the capital experienced a 3.8 per cent reduction. This is the worst fall since 2011.
Nationwide, property prices rose by 1.5 per cent to an average of £227,871 across the UK.
The majority of regions continued to show house price growth, however this was extremely variable dependent on the area. For example, the South East saw sluggish growth of just 0.3 per cent.
Overall growth was up 2.8 per cent in comparison to this time last year. This rise was well below the higher rates seen in the last five years.
Economics director at IHS Markit, Paul Smith, spoke out about the findings and offered some suggestions as to why conditions are beginning to stagnate, saying: ‘The subdued performance of the UK 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. 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.’
Chief economic advisor at EY Item Club, Dr Howard Archer, said: ‘The March spike in house prices reported by Halifax does not change our view that 2018 will be a difficult year for the housing market. We still expect price gains over the year will be limited to a modest 2 per cent.’