Has a property market slowdown begun? Official figures show house prices fell in September with London down 0.7%
Prices in the capital slipped 0.7% last month - first drop for nearly a year
Only three regions had monthly growth - the East, South West and Wales
Average house value is now £177,299 data shows
By Lee Boyce for Thisismoney.co.uk
House prices dipped in seven of 10 regions in England and Wales last month adding further evidence steam is starting to run out of the market.
Prices nudged back 0.2 per cent in September bringing the average house value to £177,299, according to the latest Land Registry figures.
Significantly, property prices in London fell 0.7 per cent, the first monthly fall experienced in the capital for nearly a year. It came off the back of a 2.4 per cent increase in August and 2.6 per cent in July.
Clear gains: Annually, prices in the South East and London have grown far faster than elsewhere
Yorkshire and Humber saw the biggest monthly falls of 2.2 per cent, followed by the West Midlands at 1.3 per cent.
Only monthly prices in the East, South West and Wales were slightly higher, the figures – which lag one month behind other indices – show.
More specifically, Redcar and Cleveland experienced the strongest monthly growth with an increase of 2.8 per cent. Blaenau Gwent saw the most significant monthly price fall with a drop of 5.8 per cent.
The cities where house prices have surpassed their pre-crisis peak
Sharp slowdown in London property forces Foxtons into profit warning
Brighton, Southampton and Luton are tipped as the three hottest future locations
Annually, house prices are up 7.2 per cent. This yearly figure peaked in August when values were up 8.3 per cent.
House prices are up 18.4 per cent annually in London, considerably higher than any other region, the next nearest being the East at 10.9 per cent.
It means the average price in the capital is £460,521, more than double the national average. But despite this, there are clear signs of a slowdown in London.
Last week, estate agents Foxtons, which is based in London, said property sales commissions were £16.4million for the three months to 30 September, a fall of 7.8 per cent on a year earlier after a drop in sales.
Monthly winners: Prices increased in just three regions in September - the East, South West and Wales
Peter Rollings, chief of estate agents Marsh & Parsons, says price falls in the capital could be a result of mansion tax worries.
He said: 'London's economy thrives on its global standing as an unbeatable destination both to live and to do business and talk of a mansion tax and other populist wealth taxes threatens to erode this reputation.
'A quarter of all Prime London property purchases are made by overseas and foreign nationality buyers, though the vast majority have chosen to live and work here, adding hugely to the strength and vibrancy of the London economy.
'The uncertainty surrounding these proposals could shake the foundations of London's property market as the political rhetoric picks up ahead of May's general election, and we'd enter dangerous territory which could filter down to all sections of the market if these buyers packed up and turned their attentions elsewhere.'
London boom: Despite the slowdown in September, prices in the capital have soared in the last year
The Land Registry said the number of property transactions has increased over the last year. From April 2013 to July 2013 there was an average of 64,317 sales per month. In the same months this year, the figure has reached 75,950.
Last week, a report by property website Rightmove tipped Brighton, Southampton and Luton as the three hottest future house price locations for the next five years, after saying prices are now rising faster in the South East than London.
This has been the result of a ripple effect occurring as cash-rich Londoners move out of the capital and buyers seek better value for their money and more affordable properties.
Howard Archer, chief economist at IHS Global Insight, said: 'With housing market activity clearly off its early-2014 highs, we suspect house prices will generally rise at a more restrained rate over the coming months.
'Specifically, we expect house prices to rise by around one per cent quarter-on-quarter in the fourth quarter of 2014. We see house prices rising by around five per cent in 2015.'