London house prices:summer slowdown cuts prices by £16k – but September is tipped for a rebound

The average asking price of a London home has dropped by £16,300 in the past month as the annual summer slowdown hits the top of the market hardest.

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London has recorded the biggest price drops in the country as prices of the capital’s most expensive homes continue to plunge dramatically, new figures show.

The average asking price of a home in the capital dropped by £16,301 (2.6 per cent) this month to £619,409, according to Rightmove’s house price index.

This is the fourth consecutive month of price drops across the capital, as the annual slowdown of the summer property market follows months of Brexit uncertainty and the rush of buy-to-let investment ahead of April's stamp duty hikes.

Nationwide, average house prices are still more than 50 per cent cheaper than the Greater London average, with a fall of 1.2 per cent taking the average price of property coming to market to £304,222.

Miles Shipside, Rightmove director and housing market analyst, says: “London has seen its price boom curtailed by punitive stamp duty and over-stretched affordability and has been in readjustment for a year or more, mostly affecting inner London.”

Market conditions are taking a greater toll on the capital’s prime property market than on any other sector, with prices at the top end of the ladder slashed by £224,000 (14 per cent) in just four weeks.

The capital’s two most expensive boroughs have plunged dramatically, with Westminster and Kensington and Chelsea hit the hardest.

While asking prices have dipped slightly in some of London’s cheapest boroughs, strong demand and a lack of available homes means that first-time buyers will notice only minimal price drops on homes with two bedrooms or less.

Three- or four-bedroom properties are the only market sector to have price growth this month, with a slight increase of 0.5 per cent, taking average prices for second-steppers to £672,000.

“There is traditionally a market rebound starting in September, so by autumn we should get a clearer view of the strength of any post-referendum hangover. The latest interest rate cut, making already cheap-to-borrow money even cheaper, should act as an added confidence boost,” says Shipside.

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