An early sign of a possible recovery in the London housing market may be appearing, according to data consultancy Hometrack.
It’s just a glimmer at the moment but Hometrack’s monthly city index reports that while house prices in nearly two-thirds of London local authorities have fallen year-on-year, the proportion showing a decline is expected to reduce over the remainder of the year.
Prices fell in 29 local authorities covering the capital and the commuter belt over the past 12 months with inner London’s Kensington in Chelsea suffered the worst year-on-year fall - down 4.9 per cent to an average of £1.17m.
It is followed by other prosperous boroughs including Camden, and Hammersmith and Fulham, where prices slid 4.3 per cent and 3.1 per cent to £737,000 and £707,000 respectively.
But now the good news - the number of London postcodes registering month-on-month price falls has dropped to 44 per cent from a peak of 70 per cent in December of last year.
This means that 56 per cent of postcodes are now registering month-on-month price gains - this implies, says Hometrack, that the proportion of markets registering annual price falls will slow further over the rest of the year.
Although London as a whole has registered a 0.4 per cent decline year-on-year, lower value markets in outer and surrounding London have registered modest price rises over the last year as affordability has been less stretched than in central areas.
For example, prices in Barking and Dagenham rose 2.3 per cent year-on-year to an average of £296,400. Havering, Spelthorne and Bexley experienced the next highest rise in home values, with prices increasing 1.4 per cent year-on-year in each area.
On a national level, house prices in UK cities were up 3.2 per cent annually in September, driven by strong growth in regional cities outside the south east of England.
Prices are rising fastest on an annual basis in Liverpool (up a hefty 6.9 per cent), followed by Birmingham (6.5 per cent), Leicester (6.4 per cent) and then Manchester and Glasgow (both up 6.2 per cent).
“London’s housing market has registered a major slowdown in price growth over the last two years as stretched affordability levels, multiple tax changes and weaker market sentiment have all impacted the demand for housing. Turnover has fallen much more than prices which tend to be ‘stickier’ on the way down with few households being forced sellers” explains Richard Donnell, insight director at Hometrack.
“Our latest analysis reveals price falls are concentrated in inner London while values continue to rise slowly in the most affordable parts of outer London and the main commuter areas. Price growth has firmed over the last six months but the annual rate of growth remains negative and we expect the current re-pricing process to run into 2019.”