London house prices fall in November
An estate agent's window in central London. Photograph: PA
Survey by estate agent Haart shows drop of 14% in south-west London in November, compared with 1.9% for capital as whole
House prices in London went into reverse in November, falling below the £500,000 mark on average, and have slumped in some of the wealthier south-west postcodes of the capital, in the latest evidence that 2014’s property boom is cooling rapidly.
Figures from estate agency Haart, which has more than 200 branches across the UK, found that prices rose nationally by 0.6% during the month, but fell by 1.9% in London. The average figures mask extraordinary declines in parts of the capital in a sharp turnaround from the earlier boom.
Haart said prices in north London fell by 6.7% last month alone, while in south-west London, stretching from Richmond to Streatham, prices were now down 14% over the past year. “House prices in this postcode area have been particularly ‘frothy’ in the good times over the past few years, so will naturally see a more significant dip during the ‘cooling off’ period,” said Haart.
The London figures are based on data from Haart’s 42 branches in the city which can show exaggerated swings in certain boroughs, but follow a report by the website Rightmove which said asking prices in the capital fell by £30,000 in November alone.
Rents have also started falling, according to separate data from letting agents Reeds Rain and Your Move. It found that rents across England and Wales dropped to £768 in November – down 0.2% since October, with the biggest falls in the south-east.
David Newnes, director of Reeds Rains and Your Move, said: “Not only are wages higher than a year ago and wider inflation dropping rapidly, but now rent rises are cooling once again too. For those tenants still reeling after half a decade of financial pressure, a more affordable rental market is a welcome boost.”
However, Haart said there were signs that George Osborne’s stamp duty changes may be reigniting interest among buyers. It saw a 15% surge in buyer inquiries the day after the autumn statement slashed stamp duty costs for purchases below £937,000.
Chief executive, Paul Smith, said: “As we head into 2015, 98% of buyers are set to make a stamp duty saving. The effect was immediate as we saw a 15% increase in inquires the day after the announcement as buyers who were previously reluctant to take a step on to or move up the property ladder suddenly had the door opened.”
Despite the signs of a marked London slowdown, Haart said it was confident prices nationally would rise again in 2015, with 11 buyers chasing each property for sale. “We are optimistic for 2015 and while we may not see the market reach the giddy heights of the first half of this year, which is no bad thing, we predict that property price growth will remain strong and confidence will continue to ride a high as we approach the next election.”
The collapse in both the oil price and the Russian rouble will hurt the prime central London market, according to forecasters Capital Economics. It said: “The collapse in the value of the currency means an average priced home in a prime London borough in roubles is now around twice as expensive as it was at the start of the year.”
2015 House price forecasts
Halifax: UK house prices are set to rise by only 3% to 5% in 2015, with the looming general election likely to cause a lull in activity early next year, said Britain’s biggest mortgage lender.
Royal Institution of Chartered Surveyors: Prices will rise by 3% nationally, with rents ahead by 2%. But the surveyors’ body predicts zero price growth in the capital but 5% in the north west and Yorkshire.
Savills: The upmarket estate agency reckons prices nationally will rise by 2%, but remain flat in London. Over the next five years, it predicts that London will see the lowest price growth in the UK, outpaced for the first time by previous ‘cold spots’ such as the north east, Humberside and Wales.
Centre for Economics and Business Research: Analysts at the CEBR are forecasting outright price falls in 2015. It said prices will fall by 0.8% nationally, but by more in the capital. “The decline in prices will be led by London. Prices in the capital are expected to fall by 2.6% in 2015 as domestic and overseas demand fall back.”