London drags down housing market

London drags down housing market

London has performed worse than any other region in the average price rise of a property coming to market, according to new data from Rightmove.

The online comparison site’s House Price Index, out today (May 20), showed the average price of a property coming to market in the capital in May was £621,589 — 2.5 per cent less than in the same period last year.

Inner London boroughs dragged London’s overall score down as Westminster house prices fell 6.3 per cent, Tower Hamlets was down 6.1 per cent, Hackney fell 4.9 per cent and Lambeth saw a drop of 4.7 per cent.

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By comparison, further out London boroughs such as Barking and Dagenham and Bexley saw a slight increase in the average price of property coming to market.

Both the south east and east of England also saw a drop year-on-year in new house prices — 1.1 per cent and 0.9 per cent respectively — but every other region saw an increase when compared with May 2018.

In fact, prospective buyers in Wales, the West Midlands, the East Midlands and the north west were facing all-time highs for the average property price coming to the market as the regions set asking price records for newly-marketed properties.

Buyers in Wales were faced with prices that were 4.1 per cent higher than 12 months ago, with the West Midlands at 3 per cent, the East Midlands at 2.5 per cent, and the north west at 2.1 per cent. 

Miles Shipside, Rightmove director and housing market analyst, said: "These increases are the result of a combination of strong demand, buyers’ affordability headroom, and a continuing shortage of suitable properties.

"Agents in these areas say that Brexit concerns are not really on the agenda of home-movers; they are more concerned with satisfying their housing needs."

The four regions also saw a steady number of new sellers — down 0.3 per cent compared to last year — while every other spot in the UK saw new listing numbers fall by an average of 6.5 per cent.

Across the UK, the price of newly-marketed property increased by an average of 0.9 per cent month-by-month.

In the index, Rightmove stated this was buoyed by the "spring market" — a typically prosperous time for the housing market — and was consistent with the previous two-year average of 1 per cent.

Commenting on the index, Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "Asking prices are not selling prices, which explains why some of these figures do not match results from other recent housing surveys. 

"Overall, although there has been little change, that masks some considerable regional differences. For instance, London is acting as a drag on the rest of the UK housing market and prices don’t include inflation so have risen or fallen further in real terms.

"The spring bounce is taking place but not reaching the heights we would have expected and certainly not in the capital.

"Looking forward, we are not expecting significant changes one way or the other, at least until Brexit is clarified."