House price growth in London has reached a seven-year low, according to data provider Hometrack (part of the Zoopla property group).
Prices in the UK capital dropped in nearly half of the cities postcodes (42% of postcodes).
The latest Hometrack price index for London reveals that house price growth across the city has slowed to just 1.0% (the lowest annual rate of growth since August 2011), down from 4.3% last year.
The data indicates that the declining property prices in London isn’t just occurring in the most expensive parts of the central areas of the city, but also declining in more suburban areas.
While more central areas of the city such as Camden, Islington, Wandsworth and Southwark are reporting the biggest declines, property prices are also taking a hit in more suburban regions of the city such as Elmbridge, Kingston upon Thames and Harrow.
By the middle of 2018 the consultancy predicts year-on-year house price growth in London to be negative.
“The weakness in London’s housing market has been building since 2015 on the back of numerous tax changes aimed at overseas and UK investors and growing affordability pressures facing home owners. Sales volumes are first to be hit when demand weakens and housing turnover across London is down 17 per cent since 2014” said Richard Donnell, insight director at Hometrack.
“We expect the balance of markets registering price falls to increase over 2018 as prices continue to adjust to what buyers are prepared to pay. Average London house prices are up 86 per cent on 2009 levels so there is a sizable equity buffer to absorb any price falls” he added.
House price growth in other major UK cities, such as Edinburgh, Liverpool and Manchester, is an entirely different story, with prices in those regions rising more than 7% per year.