Property price growth in London have reduced and is now 3.7% over the year in contrast to a rise in prices on average in the country.
The Office of National Statistics (ONS) data shows property prices in London reduced by -0.9% in the month to February 2017 with the average house price in the capital £16,014 lower at £474,704.
This will be a relief for first time buyers as a fall in house prices means it is more affordable to buy their first home and home movers may find a smaller gap between their current and the next home.
Growth in house prices for London are also lower at 3.7% for the year down from 6.2% last month compared to an average rise of 0.5% to 5.8% for the year in the rest of the country.
Revival of central London properties
House price growth has reduced across the capital including outer London although central London has seen a large increase when compared to a year ago.
Kensington And Chelsea property prices are up 10.1% or £130,825 over the year to £1,425,428 and City of Westminster gains 9.5% with average prices now £1,082,628.
Average prices and annual change in London for February 2017 from the ONS for the top ten boroughs are shown below.
| London borough | House prices |
Annual changes |
|---|---|---|
| Havering | £362,188 | 11.8% |
| Kensington And Chelsea | £1,425,428 | 10.1% |
| Haringey | £562,564 | 9.8% |
| City of Westminster | £1,082,628 | 9.5% |
| Redbridge | £408,175 | 8.1% |
| Harrow | £480,348 | 8.1% |
| Enfield | £396,260 | 7.7% |
| Croydon | £362,869 | 7.4% |
| Hillingdon | £418,289 | 7.0% |
| Kingston upon Thames | £499,983 | 6.8% |
Outer London borough Havering leads the capital with house prices rising 11.8% or £38,258 and average properties worth £362,188.
Next is Haringey up 9.8% or £50,366 over the year and average properties now worth £562,564.
House prices are reducing for some boroughs with Tower Hamlets down -2.9% over the year, Brent lower by -2.3%, Islington down -1.9% and Hammersmith and Fulham lower by -0.2%.
In the capital buy-to-let landlords will still look to outer London for affordable properties to help improve rental yields.
Gains strong for East of England
The average house price in the UK is £217,502 and the rate of growth of 5.8% for the year is less than the growth seen in 2016 which was 7.3%.
Average prices and annual change for the UK to February 2017 from the ONS are shown below.
| Area | Annual changes | Property values |
|---|---|---|
| London | 3.7% | £474,704 |
| South East | 5.4% | £311,539 |
| East of England | 10.3% | £281,665 |
| South West | 6.2% | £241,582 |
| England | 6.3% | £234,466 |
| West Midlands | 7.0% | £180,516 |
| East Midlands | 7.5% | £176,784 |
| North West | 6.7% | £152,618 |
| Yorks and the Humber | 5.2% | £152,591 |
| Wales | 1.8% | £145,293 |
| Scoltand | 3.1% | £138,821 |
| Northern Ireland | 5.7% | £125,480 |
| North East | 2.2% | £123,781 |
The East of England has continued to lead the country with the double digit house price growth of 10.3% over the year with 2.0% rise in the last month.
Areas that are struggling are the South East with a fall of -1.0% for the month, London and Wales down -0.9% with Scotland lower by -0.6% and the North East down -0.1%.
According to the Royal Institution of Chartered Surveyors (RICS) report for February 2017 housing activity remains subdued with transaction volumes and new buyers unchanged.
For remortgage buyers in London the fall in house prices means there is less capital available to release if they want to make home improvements.
Older equity release buyers can stay in their home rather than downsize avoiding the expense of stamp duty by accessing the wealth in their property with a lifetime mortgage.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even give to a family member.
Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
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