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London House Prices Lose Value


London house prices lose value, the rest of the UK is on the rise

 

In March of this year house prices in London experienced its sharpest fall since 2009 as the annualised rate of inflation dropped to minus 0.7% as stated by official Land Registry figures for March.

Across the rest of the UK there has been an overall rise of 4.2% and a whopping 6.7% in Scotland. House prices have been steadily falling in London since the EU referendum in June of 2016, this information comes from the ONS which compiles the house price index based on Land Registry data.

The average price of a home in the UK in March was £224,000, which is £500 less than the previous month and £9,000 higher than the same month of the previous year. The 4.2% annualised inflation figure as recorded by the ONS is substantially higher than those provided by both Halifax and Nationwide, of which produced figures of 2.2% and 2.1% respectively.

Land Registry data is regarded as “backward looking” as it records actual prices paid and then registered, compared to the indices from the lenders, which try to capture price activity at the point of sale.

Transaction activity in the capital has declined over the past year as seen in separate figures revealed from UK Finance. The overall number of first-time buyers fell by 3% with the number of home movers dropping by 4.3% in the first quarter of 2018 when compared with the same period a year previous.

Economists are expecting an inflation in house prices of around 2% in 2018, with many making a somewhat modest recovery come 2019.

The chief economic adviser to the EY Item Club has stated that: “The latest data and survey evidence largely point to lacklustre housing market activity as it is pressurised by still-limited consumer purchasing power, fragile confidence and concerns of further gradual Bank of England interest rate rises following November’s first hike since 2007, We expect house price gains over 2018 will be limited to a modest 2%. At this stage, we expect prices to rise no more than 3% in 2019.”

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