London house prices record biggest slump in a decade in September

House prices and rents are set to rise further in 2017, underpinned by a supply shortageReuters

House prices in London recorded their biggest decline of the year in September, falling £18,000 (€20,480) from the previous month, a new survey has shown.

According to data released on Monday (18 September) by property website Rightmove, the average price of a property in the capital fell 2.9% to £610,912. The decline was largely due to a slump in prices in some of London's prime locations, such as Kensington and Chelsea, which saw prices plummet 14.3% month-on-month, while prices in Camden and Hammersmith and Fulham dipped 7% and 1.5% respectively.

However, prices in Hackney and Southwark increased by 5.2% and 9.4% on the month, respectively.

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"We've advised sellers in many locations across London that the current market requires sensible and realistic pricing," said Robert McLaughlin, sales director at Kinleigh Folkard and Hayward in London.

"Pockets of high demand still exist but tend to be concentrated around specific streets, schools and transport hubs."

The drop in prices in London was the main contributor to a 1.2% decline to £310,000 on a country-wide basis, the first time the housing market has recorded a slowdown at this time of the year since 2013.

However, the North East and Yorkshire and the Humber bucked the downward trend, with prices growing 0.5% and 0.2% month-on-month respectively.

Meanwhile, the report also showed housing demand remained high, with the numbers of sales being agreed by estate agents rising 4.8% year-on-year, including a 5.6% increment in London.

"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," said Miles Shipside, director of Rightmove.

The report comes just over a week after Halifax suggested the slowdown in Britain's housing market could be coming to an end, as UK house prices rose 0.1% between June and August compared to the preceding three months, marking the first quarterly increase since March.

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According to data released by Halifax on 7 September, prices in the three months to August were 2.6% higher than in the corresponding period a year earlier, hitting £222,293 which is just above the previous high of £222,190 recorded in December last year.

While the annual rate of growth in August was higher than the 2.1% recorded in July, which was the lowest annual rate since the 2% recorded in April 2013, it remained well below the 10% peak it reached in March 2016 when transactions grew sharply ahead of the introduction of new higher stamp duty tax rates for buy to let and second homes that came into effect in April.

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