London house prices fall for the first time in more than a year

[LONDON] House prices in London suffered their first drop since July 2024, according to data released on Wednesday (Oct 22) by the Office for National Statistics (ONS).

The average cost of a home in the UK capital fell 0.3 per cent in August compared with a year earlier, the ONS said.

Rents for dwellings rose, but at the lowest rate since 2022.

Values in London were dragged down by the price of flats which declined 2.6 per cent year on year, the largest annual drop since February 2024.

In contrast, prices for semi-detached and terraced houses increased on an annual basis.

The property market is being weighed down by fears that Chancellor of the Exchequer Rachel Reeves could lift taxes at next month’s budget, the website Rightmove said on Monday.

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Still, house prices were up 3 per cent across the UK as a whole in August, driven by above-inflation growth in the north of England and the East Midlands.

By contrast, prices fell sharply in salubrious parts of London, down 15 per cent in Westminster, 7 per cent in Kensington and Chelsea, and 8 per cent in Hammersmith and Fulham.

A typical London home costs £566,000, the ONS data shows, compared with £273,000 across all of the UK.

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Overall, the property market in the UK this year has “weathered higher interest rates, economic turbulence, and shifting stamp duty expectations better than many anticipated”, said Nabil Taleb, economist at PwC UK.

Britain’s tenants have been hit by soaring rents in recent years, yet there were further signs of some relief in Wednesday’s data.

The ONS said that average private rents across the country were up 5.5 per cent in September to £1,354 per month, the weakest annual increase since late 2022.

In London, where demand for housing has persistently outstripped supply, rental costs rose 5.3 per cent, down from a 5.7 per cent increase in August.

Rental inflation in the capital has slowed by the most of any region since a peak in November last year when costs surged 11.5 per cent. BLOOMBERG