Agents have put a brave face on official government figures which have shown a shock fall in London house prices and muted growth across the rest of the UK.
Data from the Office for National Statistics, HM Land Registry and other national statistics bodies shows that prices in London have tumbled at the fastest annual rate since 2009 according to government figures.
They dropped 4.4 per cent in the year to May – the largest drop for the capital’s housing market since August 2009 when there was a 7.0 per cent annual fall.
Across the UK as a whole, house price growth remains slow, with northern areas and Wales seeing stronger growth according to the figures produced jointly
Average UK house prices increased by 1.2 per cent in the year to May, slowing from a 1.5 per cent increase in April; this means the average UK house price stood at £229,000 in May.
But agents say this pessimistic performance doesn’t reflect a better-than-expected start to the summer in terms of deals done.
“The historic nature of the data … does not reflect the recent improvement we have seen on the ground, particularly in buyer enquiries and the number of sales agreed” explains Jeremy Leaf, north London estate agent and a former RICS residential chairman.
Marc von Grundherr, director of lettings and estate agent Benham and Reeves, commented:
“The market may continue to be dampened by price growth in London and the south east, but any transaction at a premium level will take longer to materialise and so it will take time for these regions to regain the momentum we are currently seeing build across other areas of the UK property market” claims Marc von Grundherr, director of Benham and Reeves, another London agency.
Meanwhile Richard Donnell, research and insight director at Zoopla, says he expects London price falls to moderate over the next two years.
“In late 2018 the proportion of local London markets experiencing annual price falls peaked at 80 per cent and has been steadily declining since this time, over the last three months just 28 per cent of markets registered price falls in London. Average residential values in London are bottoming out for now and we predict sales volumes will slowly start to grow across late 2019 and market fluidity will gradually return” he concludes.
And Sam Mitchell, chief executive of online firm Housesimple, adds: “London's price fall has plagued the UK average partly due to uncertainty but mainly because of the punitive stamp duty regime, while slowdowns in the south and east of England over the past three years have also taken their toll. Yet economic factors that underpin the property market are looking strong. Plus, the housing market is still showing sturdier than expected signs of resilience amid political uncertainty.”