House prices in London: parts of capital see prices fall at fastest rate since depths of financial crisis

House prices in London’s financial districts are crashing at double digit rates not seen since the depths of the banking crisis, official figures reveal today.

They fell by 13.4 per cent in the City of London and 11.8 per cent in Tower Hamlets, home to tens of thousands of Canary Wharf banking workers.

The dramatic figures suggest that the local markets are being devastated by the Brexit uncertainty hanging over London’s huge financial services sector.

The fall in Tower Hamlets wiped more than £55,000 from the average value of a home in the borough, leaving it at £413,348, and was the biggest annual fall since September 2009 when the market was still reeling from the banking meltdown.

In nearby Hackney, where prices shot up during a period of rapid gentrification, average prices dropped by eight per cent to £528,442, almost £46,000 lower than a year ago.

Across London as a whole the average price of a home was down 1.7 per cent — or £8,153 to £473,609 — with prices falling in two thirds of boroughs.

Some are still recording small increases, however, including Greenwich, where they rose 2.9 per cent, and Barking and Dagenham, up 2.4 per cent.

Some analysts warned that the market appeared close to a tipping point.

Jonathan Samuels, chief executive of lender Octane Capital, said: “With Brexit Day approaching, the hope is that strong employment levels, falling inflation, a lack of supply and continued low borrowing rates will prevent a collapse in prices.

"But against a backdrop of such extreme political uncertainty, there’s a genuine fear in some corners that 2019 could be 2009 all over again. What happens in the months ahead could shape the fortunes of the property market in the years ahead.”

Jonathan Hopper, from buying agency Garrington Property Finders, said: “There’s only one thing the property market wants for Christmas — stability.”

He added: “We’re seeing a steady stream of tactical buyers emerging from the woodwork to snap up homes at large discounts.”