UK House Prices Fall as Economic Growth Halves

The average UK asking price for a home coming onto the market fell by 1.2% to £310,000 ($420,329) in September. Homeowners typically enjoy an autumn spike in property values, but new data for England and Wales shows that this is the first fall recorded at this time of year since 2013.

It equates to a drop of around £3,660 in average values. The property website, Rightmove, said a 2.9% or £18,358 price slump in London had played a part in the drop, Sky News reported.

Economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries.

The average price of a home in London now stands at £610,912, down from £629,270 in August.

The drop was exacerbated by larger falls in some of the capital’s high-end boroughs such as Kensington and Chelsea, where property values plunged by more than £300,000 from about £2.1 million to £1.8 million.

The North East and Yorkshire and the Humber bucked the downward trend, with asking prices there increasing month-on-month, by 0.5% and 0.2% respectively.

Housing demand remains high, the figures showed, with the numbers of sales being agreed by estate agents up by 4.8% on a year ago—including in London, which saw an increase of 5.6%.

Miles Shipside, director of Rightmove, said: “Estate agents are clearly advising many sellers that they have to lower their price expectations to fit in with buyers’ stretched financial resources, with that price compromise hopefully generating extra buyer interest.”

Robert McLaughlin, sales director at Kinleigh Folkard and Hayward in London, who was quoted in Rightmove’s report, said: “We’ve advised sellers in many locations across London that the current market requires sensible and realistic pricing.

Rightmove said it measured more than 98,000 asking prices, which represented around 90% of the UK market. The properties were put on sale between August 13 and September 9. A spokesman said its updated methodology went back to 2010, and the annual fall of 3.2% for London was the largest drop so far this decade. The monthly fall in the capital is the largest since December 2016.

The figures come days after the Halifax said UK house price growth had picked up last month, with a 1.1% rise in August.

Nationwide building society said property values had dipped slightly by 0.1% to £210,495.