The average asking price of a home in London has tumbled by more than £30,000 over the past month, figures from property website Rightmove showed on Monday, with new sellers in all of the capital’s boroughs seemingly becoming less optimistic about the price they can achieve.
Across the country, Rightmove reported the largest ever monthly fall in the price of properties coming to market, a 3.3% or nearly £9,000 decline to £258,424.
Asking prices in Greater London have been falling since the summer, and the drop to an average of £570,796 from £601,180 in November, represents a 5.1% decline in sellers’ expectations over the month, the second biggest after August. Prices were down in all 32 London boroughs, with the biggest drops in Hammersmith & Fulham and Hackney, where new asking prices dropped by 7% and 6% respectively.
However despite the drop, average asking prices of homes coming onto the market across London are up by £57,000, or 11.1%, on December 2013. In Hackney, sellers are asking 22.5% more than in December last year, while in Haringey prices are 21% higher.
Rightmove reported month-on-month drops everywhere except Wales, where new sellers put homes up for sale for 0.2% more than in November, at an average of £167,271.
However asking prices are set to end the year up 7%, and the website said it expected further increases in the range of 4% to 5% in 2015.
The falls come despite the changes to stamp duty announced in this month’s autumn statement. Estate agents have predicted the changes could lead to higher prices being paid for homes, particularly around the old “cliff edge” thresholds at which higher tax rates kicked in.
Miles Shipside, Rightmove director and housing market analyst, said a price fall was not unexpected in December, but the drop seemed to be a sign that the market was continuing to cool.
He said: “Though sellers are fewer in number at this time of year, those that do come to market are often keener to sell so price lower in a bid to stand out.
“The overall picture for the year is still one of a much recovered property market, with sellers and their estate agents confident enough to be putting property on the market at a higher price on average than a year ago, although we predict a slower pace of price growth in 2015.”
Rightmove said it expected the south-east of England to see the highest growth in prices next year as the London ripple effect continued to spread and the shortage of homes for sale remained acute.
“London will not be the price rise powerhouse leading the rest of the country as it has been in 2014,” it said. “Sectors of the London market will continue to readjust with several different forces at play. Affordability has already been stretched to its limit in some inner London locations, and there are also winners and losers with the stamp duty changes. The threat of mansion tax on properties over £2m will remain a deterrent until at least May’s election.”
Property firm Hamptons International said it was expecting house prices to grow by 4% in 2015 and 4.5% in 2016, with the stamp duty reforms boosting both values and transactions in the first half of next year.
It forecast the lowest growth in London, where prices will rise by 1.5% over the year, saying the market would be limited by affordability issues and, above £1m, by higher stamp duty bills. Outside the capital it is forecasting 4% growth across much of the south of England and the north-west.
“Smaller price rises outside London in the last year mean that affordability conditions are not as stretched and, as the economy picks up, there is still potential for house prices to rise further and faster than the capital,” said the firm’s research director, Fionnuala Earley.