London house prices: average cost of a home continues to drop at a slower rate as Brexit and General Election turmoil drags on

Property prices in London fell for the 19th month in a row, although at a slower pace than during the summer as home buyers started to sense “the end of the beginning” of Britain’s political turmoil.

The average cost of a home in the capital fell 0.4 per cent to £474,601 in the year to September, according to the latest figures from the Land Registry. The last year-on-year rise in London house prices was in February 2018.

“A surprising aspect perhaps of these figures is that there hasn’t been more of a reduction in view of the recent political turmoil,” said former Royal Institution of Chartered Surveyors Residential Chairman, Jeremy Leaf.

“But what we are finding on the ground is relief that the end of the beginning at least may soon be in sight for Brexit uncertainty. This is resulting in more realism and release of some pent-up demand in expectation of some post-election improvement in activity.”

House prices fell in 20 out of 33 London boroughs, with the biggest drops seen in the two most expensive boroughs — City of Westminster (12.3 per cent), where the average house price is now £897,000, and Kensington & Chelsea (11.4 per cent) where prices fell to £1.23 million.

First-time buyers bought the biggest proportion of homes, reflected by homes in the sector seeing the smallest price falls of 0.1 per cent, bringing the average price paid for a first home in London to £415,618.

However, property experts pointed out that, despite many months of falling house prices, homes have not necessarily become significantly more affordable for many, with high prices underpinned by high demand and lack of supply.

“More subdued numbers from the Land Registry come as no surprise, given the political uncertainty which continues to rage, and values are holding up remarkably well considering,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.

“London is still seeing the lowest annual growth in prices as the capital falls more into line with the rest of the country. While this is welcome for those trying to buy in the capital, let’s not get carried away as it is still difficult to afford property in London and the South-East.”

Josef Wasinski, co-founder of Wayhome home ownership consultants, said: “For many aspiring homeowners, the dream of buying a home is increasingly out of reach. Even if you have a salary that sits above the national average, the gap between that and house prices just remains too wide for some.”

The biggest increase was in the City of London where house prices rose 12.1 per cent, although the low number of residential transactions in the borough means average figures are often skewed by one or two sales.

The other biggest rises were in Hounslow (6.1 per cent), Hackney (5.4per cent), and Newham (4.1 per cent).