London's flat: house price growth lowest in country as number of homes for sale nears record low

The average cost of a house in the capital rose by just one per cent in the year to April 2018 – the lowest growth in the country – according to the most recent data.

This takes the average price of a property in London to £485,000 according to Land Registry and Office for National Statistics (ONS) figures.

However, average house prices within the capital range from £1.4 million in the west London borough of Kensington and Chelsea to £296,000 – less than a quarter of the price – on the opposite side of the city in Barking and Dagenham.

The rate of price change also varied widely across London, with more expensive boroughs once again tending to see prices fall and many of the cheaper boroughs experiencing price rises.

The major anomaly to this trend was Camden, which saw the biggest price growth, up 7.5 per cent on a year ago to £859,000.

However, the next biggest rises were all at the lower end of the spectrum with prices in Havering up 5.5 per cent to £374,000; Barking and Dagenham up 5.4 per cent to £296,000; and Bexley up 4.5 per cent to £344,000.

TRANSACTION NUMBERS DROP

Buyers are still struggling to afford London homes following years of soaring prices and so are looking to cheaper outer boroughs, with first-time buyers in particular finding it hard to get on the ladder.

"For those struggling to make it onto the housing ladder, UK house price growth means the goal posts are moving considerably from month to month," said Andy Sommerville, director at Search Acumen.

"The longer it takes to save, the more house prices rise, the cycle continues."

Sellers are also reluctant to enter the property market with the number of new homes up for sale continuing to drop to near record lows according to the Royal Institution of Chartered Surveyors (RICS) survey for April.

“The increase in house prices is more to do with the lack of supply of appropriate property in places where people most want to live rather than a marked improvement in confidence,” said north London estate agent Jeremy Leaf.

“Looking forward, we do not expect major change but do hope more sellers appreciate the difference between vanity and sanity when it comes to recognising these new market conditions.”

This was the sixth consecutive month where London recorded the slowest house price growth of any UK country or English region. The South West saw the biggest rises, with average prices increasing 6.1 per cent to £255,000.

“The capital has narrowly avoided a third consecutive month of negative annual house price growth but the gulf between London and the regions remains a sign change is in the air,” said Lucy Pendleton, founder director of James Pendleton estate agent.

Mike Scott, chief property analyst at Yopa, said: “If London’s slowdown spreads to its commuter belt, we may soon see the emergence of a new north/south divide, with prices rising faster in the north of the country than in the south east."