In data recently published by the Nationwide Building Society, it has been revealed the London property prices have dramatically declined. In fact, it has been the worst decline in over 10 years.
Fastest levels of decline since 2009
For example, in the first quarter of 2019, London house price had dropped by 3.8% compared to the same period in 2018. It is considered to be the quickest level of decline by experts since 2009, and it also marks the seventh consecutive period in which the house price index has dropped in the capital.
What is causing the decline?
The chief economist at Nationwide has stated that this trend has not been surprising. This is down to a number of reasons. One of the factors attributing to this fall has been affordability, making it far more difficult for people to be able to purchase a home.
Another is down to policy changes that have been implemented by the government in recent years. This has particularly impacted the buy-to-let market in the capital. Why? The private rental sector accounts for a much bigger proportion of housing stock in the city due to the high housing prices making it much more difficult for people to purchase their own property, leading to a generation of renters.
Prices are still high
Nevertheless, one thing to bear in mind is that whilst house prices are indeed falling in London, they are still far higher than the average house price in regions around the country. In terms of the average cost for a house in London for the first quarter this year, it was estimated to be just under £455,600. When you take into account the average prices elsewhere: (for example, in Yorkshire this averages at around £157,311 in the same quarter, £142,484 in Northern Ireland, and in the East Midlands an estimated £182,254) it is still way above the national average.
How are property prices currently?
In terms of whether or not housing market prices are on the whole increasing or decreasing, they are becoming higher in the first quarter overall. Growth has slowed down a little compared to last years average for this time of year, rising 0.4% monthly compared to 0.7% previously. One of the reasons experts believe that this growth has slowed is in part due to the growing uncertainty that has been provoked by the Brexit referendum, and what will end up happening. At the time of the Brexit referendum in 2016, prices for housing was rising at an estimated 5% a year.