London house prices: property market falling at fastest rate for a decade in Brexit chaos

The decline in London house prices is accelerating with the property market dropping at its fastest rate in a decade at the start of the year, new figures reveal today.

The average price of a London home fell 3.8 per cent to £455,594 in the three months to March compared with the same period in 2018, according to a survey from leading lender Nationwide.

That was the biggest drop since the depth of the property market rout that followed the financial crisis in 2009 and wiped £18,182 off the average value.

It was also the seventh consecutive quarter when prices have fallen since the last rise in the spring quarter of 2017.

The latest lurch downwards comes amid the political chaos over Brexit that has put off many buyers from entering the market in turbulent conditions, although some agents have reported a pick up in interest in recent weeks.

Guy Gittins, managing director at agents Chestertons said: ”It was almost inevitable that the uncertainty of Brexit would drag property prices down, especially as the date gets closer and many buyers take a ‘wait -and- see approach’.

“However, we have experienced an incredibly busy start to the year, with a sharp increase in buyer registrations, viewings and offers, which reflects pent-up demand and suggests that prices are now at a level that buyers are comfortable buying.

“I therefore see this drop as a temporary blip, and expect prices to recover once the market has more clarity on Brexit.”

Jonathan Hopper, managing director of buying agents Garrington Property Finders, said: “On the front line we’re seeing increasingly aggressive offers from buyers, who feel emboldened by their strong position and are dictating the pace of the market.

“With what should have been Brexit Day reduced to the status of just another milestone in a Brexit process leading who knows where, and who knows when, this year’s spring bounce is nowhere to be seen.”

The Nationwide survey showed that prices in the “Outer Metropolitan” commuter belt are also dropping with a two per cent fall to £355,978 while across the broader south east they were down 1.1 per cent at £274,122.

The drops in and around the capital dragged prices for England as a whole down by 0.7 per cent, the first quarterly decline since 2012.

The Nationwide figures came as the Office for National Statistics confirmed that the economy grew by only 0.2 per cent in the fourth quarter of last year, leaving overall growth for 2018 at just 1.4 per cent, the equal slowest in a decade.

Howard Archer, chief economic advisor to forecasters the EY ITEM Club said: “We suspect that the economy is headed for growth of 0.2 to 0.3 per cent in the first quarter of 2019…the suspicion has to be that March has been a difficult month for the economy given the tortuous twists and turns on Brexit.”

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