House prices slump again in London’s wealthiest areas
London house prices fell again in March, as the capital’s wealthiest areas continued to see significant drop-offs in house values.
House prices in London fell by 2.1 per cent in the year to March, though this drop was slightly softer than the 3.1 per cent in the year to February, according to the Office for National Statistics (ONS).
The UK’s house market had been seeing growth in recent months but this levelled out to zero in March, down from a 1.7 per cent rise in the year to February.
Fears that the Iran war could mean interest rates stay higher for longer have hit demand for new homes, leaving housebuilders struggling.
London’s property market had been the worst hit, but in March the rest of the country joined the capital in seeing its property market stagnate.
Kensington, Camden prices fall
The average price of a UK property was £268,000 in March, while the average house cost £542,000 in London.
London’s wealthiest areas continued to be worst hit by falling house prices.
In Westminster, the average house price fell by 11 per cent in the year to March, to £844,000.
House prices fell by 7.5 per cent in Kensington, by 7.4 per cent in Camden and by 6.6 per cent in Hammersmith and Fulham.
London’s housing market is more exposed to tax policies which affect wealthier individuals – like the end to the non-dom regime – and homeowners in the capital more often have to pay stamp duty.
It takes six days longer on average for a Londoner to sell their home, according to data from property portal Zoopla.
Zoopla said four in five first-time buyers in London end up paying stamp duty, while only one in 10 pay the tax elsewhere.
Stamp duty makes up three per cent of a house’s purchase price in London, on average, while the tax accounts for just one per cent of the fee in the rest of the country.
The North East, where the housing market had previously proved resilient, suffered a 1.2 per cent price drop in the year to March, reversed from 3.6 per cent growth to February.
London ‘no longer outlier’
Jonathan Hopper, chief executive of Garrington Property Finders, said this data shows London is “no longer an outlier” in facing a tough property market.
He said: “As London’s price correction begins to ease, it could be just getting started elsewhere. Anywhere where the number of homes for sale exceeds the number of serious buyers could see prices slip in coming months.
But Hopper said buyers will be hoping that the conflict in the Middle East might ease in coming months, “creating strong buying opportunities for the well-informed and agile”.
Adrian Benosiglio, real estate lead at audit firm RSM UK, said the slowdown in house prices across the UK is an “indicator of the urgent need for government support to help restimulate the housing market”.
“Measures such as planning and tax reforms or further support for first time buyers could help to alleviate some of the challenges faced by the sector as it navigates a challenging economic backdrop in the months ahead,” he said.