London house prices fall for first time in 8 years

Houses in Finsbury Park North London England

House prices in London have fallen for the first time in eight years although prices across Britain overall rose in September, mortgage lender Nationwide said on Friday.

The average price of a home in the capital is £471,761, down by 0.6% between July and September compared with the same period a year ago.

Annual price growth in Scotland was similar to last quarter at 1.9%, slightly up from 1.7% previously.

In the South East values edged up by 3.9 per cent, while Yorkshire was the second-worst performing region with growth of 0.4 per cent.

In the biggest sign of a slowdown since 2009, London recorded a 0.6% year-on-year fall this month, Nationwide said.

United Kingdom house prices increased at a slower pace in September, data published by the Nationwide Building Society showed Friday.

EY Item Club said United Kingdom house price growth was likely to slow to 2.5% this year, from 4.5% in 2016 on Nationwide's measure. The British capital represented the weakest performing region in the country for the first time since 2005.

Average growth in the United Kingdom remained steady at 2% - up 0.2% month-on-month.

Affordability and doubts over the economy have contributed to the price movements this year.

Nationwide said that while price growth in the South has slowed, the gap in cash terms between southern and northern England remains "exceptionally high" at £171,000 - a figure which has doubled over the past decade.

The Bank of England has recently proposed increasing interest rates, which are now at an all-time low of 0.25 percent.

He explained: "This is partly because the proportion of borrowers directly impacted will be smaller than in the past".

Pantheon Macroeconomics pointed out that Nationwide's index is based on its mortgage offers for people who likely began looking to buy a home well before the MPC warned earlier this month that interest rates probably will rise soon. Rates are at an all-time low of 0.25%, and economists believe the monetary policy committee could vote for an increase to 0.5% as early as November.

Jeremy Leaf, a north London estate agent, said buyers and sellers were still nervous about prospects for the market.



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