Official statistics confirms the first fall in London’s annual house price growth of -1.0% since September 2009, the lowest in the country.
Data from the Office of National Statistics (ONS) confirms the first fall in annual house price growth for London down -1.0% and the lowest since September 2009 when it was a negative -3.2%.
The reduction in house prices is good news for first time buyers in the capital as they would require a smaller deposit or lower earnings to get on the property ladder.
House prices in the UK are also lower with growth at 4.4% year-on-year to February 2018 reducing from 4.7% the previous month and average property values are £225,047.
Lack of properties is depressing demand
The Royal Institution of Chartered Surveyors (Rics) has reported a lack of stock in the second-hand market, limiting choice and depressing demand.
Rics asks their members option about the direction of house prices giving a net balance between -100% (all negative) to +100% (all positive).
New buyer enquiries fell for the 11th consecutive month, with a net balance of -16% of respondents reporting a fall in demand, a worse result than last month.
The lack of new home could mean remortgage buyers staying at home and increasing their mortgage to releasing capital which they can use to improve their home.
The following table from the ONS shows average house prices and annual change for homeowners to February 2018.
| Region | Average price | Monthly change |
|---|---|---|
| West Midlands | £192,648 | 7.3% |
| East Midlands | £186,071 | 6.3% |
| Scotland | £144,377 | 6.2% |
| South West | £250,816 | 4.9% |
| North West | £158,152 | 4.8% |
| Wales | £152,891 | 4.8% |
| Northern Ireland | £130,482 | 4.3% |
| England | £242,176 | 4.1% |
| South East | £322,489 | 4.0% |
| East of England | £288,468 | 4.0% |
| North East | £122,870 | 3.3% |
| Yorks and the Humber | £155,385 | 3.1% |
| London | £471,986 | -1.0% |
The strongest annual growth is the West Midlands up 7.3% followed by East Midlands rising by 6.3% and Scotland higher by 6.2%.
For buy-to-let landlords with existing properties higher house prices increases equity which they can benefit from if they sell in the future.
Over a month, the largest increase is the North East rising 3.1% where house prices are lowest in the country averaging £122,870 followed by the West Midlands increasing 2.2% for the month.
According to Rics, the average stocks per responding estate agent have fallen to a record low level with sales and price expectations continuing to be flat in the near term.
Large differences in London Boroughs
London has shown a general slowdown in its annual growth rate since mid 2016 and this is reflected in the -2.1% fall in house prices in the last month.
In London there is a large variation with some boroughs rising with the highest Redbridge up 8.9% or £36,164 year-on-year and average property values of £441,869.
The biggest fall is from the borough of Tower Hamlets falling -7.9% or -£37,317 over the year with an average property value of £470,186.
For home movers leaving areas with the higher rising values to areas with lower falling values, they will have extra equity for a deposit to buy a larger home or can reduce their mortgage.
Other significant falls are Hammersmith and Fulham falling -5.0% or -£38,568 over the year with an average property value of £725,819.
For older homeowners in the capital the considerable gain in property values since 2012 allows the equity release buyer to access wealth using a lifetime mortgage to consolidate debt or pay university fees for grandchildren.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to help your children start or expand a business or gift to a family member.
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