London house prices are dropping at the fastest pace since 2009

[LONDON] 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 (S$1. O8 million) in January, an annual decline of 2.6 per cent that's the biggest since August 2009, according to a report published by Acadata on Monday. London's highest-priced boroughs were the biggest losers, led by Wandsworth's 14.9 per cent slump and a drop of 12.2 per cent in Southwark.

London prices fell 0.8 per cent in January alone, equivalent to almost 5,000 pounds, showing the weakness that was present for much of last year continued into 2018. The market has been hurt by slower growth and faster inflation since the Brexit vote, while the Bank of England has signalled it needs to continue raising interest rates.

The capital dragged down nationwide growth in February to 0.5 per cent, Acadata said. Even excluding London and the southeast, the 2.5 per cent annual rate of increase in January remained well short of the almost 7 percent growth seen as recently as 2016.

The housing slump may also be weighing on consumer spending, which fell for the ninth month in 10 in February according to a separate report by Visa. Households spent the least on recreation since 2010.

BLOOMBERG