A new report released by Halifax reveals London house prices to be falling at their fastest rate in ten years.
Prices for houses elsewhere in the UK have been growing but the report shows a 3.2 percent decline between January and March compared with the previous quarter.
The data collated by IHS Markit and published by Halifax shows the sharpest decline in UK housing since the financial crisis.
“The subdued performance of the UK housing market, especially in the south of England, seems to reflect a general lack of appetite amongst households at present for activity related to major purchases in line with the general squeeze on real incomes seen in recent months,” said Paul Smith, IHS Markit’s economics director.
“Allied with a general undercurrent of Brexit-related uncertainty, plus the likelihood of higher – albeit still historically low – interest rates later in the year, the market seems set to persist in a subdued state for the foreseeable future,” he added.
Elsewhere in the UK, house prices are growing. The fastest rates of growth were found in the East Midlands and East Anglia, at 7.3 percent and 7.2 percent respectively.
Housing in Scotland continues to also grow and grew at 6.7 percent.
“London exhibits the weakest feedback, with a net balance of -47 percent of respondents citing further price declines. Respondents in the south-east, East Anglia and north-east, also reported prices to be falling but to a lesser extent than in the capital. Meanwhile, prices continue to drift higher across all other parts of the UK, with Northern Ireland, Wales and the East Midlands seeing the strongest readings,” said the Royal Institution of Chartered Surveyors.
Despite the decline in London’s housing, prices in the capital continue to be above the average UK figure, which is £223,819. Average house prices in the south-east are £337,776.
According to the Royal Institution of Chartered Surveyors, the downbeat property assessment is due to low demand and flat prices nationally.
Hansen Lu of Capital Economics remains positive about the UK’s housing market and said growing UK employment and British economy would be “good news” for the stagnant market.