London house prices: nearly half of sellers cut their asking price
A slump in the capital’s housing market mirrors a nationwide slowdown
Almost half of London property sellers are now cutting their initial asking price, as housing prices continue to cool in the capital and across the UK.
A report by Rightmove has found that more than four in 10 initial listings had been revised down last month, leading to an average price cut of 6.7%.
Over the past year, the average asking price for a London home has fallen 2.4%, “a far cry from growth of more than 20% in 2014″ says Bloomberg. Prices are lower across two thirds of London boroughs, with Islington seeing the highest price falls of 13%.
However, ”more affordable boroughs on the fringes of the capital are seeing modest price growth“, especially in east London. Barking and Dagenham, London’s cheapest borough, which has seen price rises of 3.3% to £313,000 over the past 12 months, according to Homes and Property.
Rightmove Director, Miles Shipside, said “initial over-optimism and a tougher market,” has led to ”an impromptu autumn sale with the largest proportion of sellers on the market having reduced their initial asking prices at this time of year since 2010″.
The Financial Times says official data from the Office for National Statistics “adds weight to the gloomy picture for London house prices” which fell for the second consecutive month in October and could be set to drop further.
Savills new forecast says house prices in London will not begin to rise again until 2020. It predicts prices in the capital will fall 1.5% this year and 2% in 2018, then remain flat in 2019, before rising 5% heading into 2020.
In total Savills shows house prices in the capital will rise 7.1% in the years to 2022, a marked decline from the 70% growth seen over the past decade.
A separate report by LSL Acadata also found that average house price growth across the whole of the UK slowed to 0.8% last month, its weakest pace in over five years.
However, the Bank of England’s decision this month to raise interest rates for the first time in a decade will have a limited impact on demand, "damped by the high proportion of households on fixed-rate mortgages and competition among lenders", Acadata said.