London house prices fell at the fastest pace since 2009, according to Land Registry data released today.
The average price in the capital was down 6% year-on-year to £505,000 after the second consecutive month of big declines. Prices fell by more than £10,000 in November alone, £26,000 in the space of two months.
Prices in London are falling much faster than the rest of the nation. The average house price across the UK is now £285,000 after a 2.1% year-on-year decline. That’s still the biggest fall since 2011.
Nick Leeming, Chairman of Jackson-Stops, said: “The figures published today suggest a frosty end to the year with buyers putting their searches on hold in order to see how mortgage rates would react as inflation fell once again. 2023 was defined by mortgage affordability pressures and a shift from immense competition, towards a smaller, more committed buyer pool.”
The numbers from the Land Registry are much more dramatic than those published by top lenders such as Nationwide and Halifax, which have reported prices rising again in recent months. The Land Registry figures only cover deals when they are complete, meaning there is a greater lag in the official data. Experts noted that this means the figures are more of a snapshot of the property market months ago.
Andrew Montlake, managing director at broker Coreco, said: “House prices continue to bump along the bottom and given the time lag in this data the weak headline number comes as no surprise. If the start of the year is anything to go by, demand for housing is still on the rise, and as long as mortgage rates do not increase once more we can expect to see a continuation of small price falls with improvements later in the year.”
Stephen Perkins, managing director at broker Yellow Brick Mortgages, said: “That was then and this is now.”
Jason Tebb, president of OnTheMarket, said: “This data is a little historic but shows another slight dip in prices in November, with the average property price £6,000 lower than a year ago.
“The pause in interest rate hikes has boosted market stability and buyer confidence, having a steadying impact on the market. The new year has got off to a promising start with many lenders reducing mortgage rates, which should encourage would-be buyers to take the plunge in the belief that the worst of the interest rate pain is behind us.
Lenders had been cutting mortgage rates to start the year, in what many commentators called a “price war”, amid hope the Bank of England would soon cut its own base rate. But the price war may have hit an abrupt end today after inflation came in higher than expected.
Tebb said: “The surprise slight uptick in inflation suggests that there may be further bumps in the road and it may take longer until base rate starts to head downwards. Pricing sensitively is as important as ever and sellers who take advice from a local agent should find plenty of opportunity to successfully transact this year.”
