London house prices are falling at the fastest pace since the depths of the recession almost a decade ago, with the capital’s most expensive areas seeing the biggest declines.
Average prices fell to 593,396 pounds ($820,000) in January, an annual decline of 2.6 percent, according to a report published by Acadata on Monday. That’s the most since August 2009.
The city will be the weakest performing market in the country over the next five years, said Lucian Cook, head of residential research at broker Savills Plc, as a decade of soaring prices means London’s more exposed to political and economic uncertainty, the prospect of interest rate increases and mortgage loan limits.
House prices in the U.K. capital falling at the fastest annual pace in years
Source: Acadata, LSL Property Services
Note: Average annual over last three months
Weakness in prime property in the U.K. capital in recent years -- partly due to tax changes -- is rippling out to other locations in the city and around the Southeast. London prices fell 0.8 percent in January alone, according to Acadata, which publishes detailed regional data with a one-month lag. That shows the weakness that was present for much of last year continued into 2018.
Business has been slow in “a lot” of offices since the start of the year, though there are more deals being done in some central outlets, Simon Aldous, a director at Savills, said in a survey published last week by the Royal Institution of Chartered Surveyors. Offers for homes are often more than 10 percent below asking prices, James Gubbins, a partner at Dauntons in Pimlico, said in the poll.
“Uncertainty over Brexit is the issue,” Gubbins said.