London house prices: Brexit 'horror show' provokes fears of steeper decline

The London property market has fallen for the fifth month running wiping more than £15,600 off the value of the average home since its peak.

The average price of a London home fell 1.2 per cent during November to £472,901, bringing the annual rate of decline down to 0.7 per cent, according to latest data from the Land Registry.

Prices topped out in the capital at £488,527 in July 2017 and have been slowly declining over the past 18 months but without yet showing any sign of a full scale collapse.

However, some property experts said last night’s Commons defeat for Theresa May’s Brexit deal may usher in a period of heavier falls.

Lucy Pendleton, director of agents James Pendleton, said: “London is feeling the strain as affordability continues to eclipse lack of supply. This latest episode of the Brexit horror show last night could easily be the straw that breaks its back and increase the capital’s rate of descent.

“London has been managing to stay within reach of break even but that could now change.”

Mark Dyason, managing director of specialist lenders Thistle Finance, said: “House prices in the capital have been cooling for some time but there’s potential for a more serious correction following May’s crushing defeat on Tuesday night.

“The odds of a disorderly, if not chaotic Brexit, have just shortened considerably and London, with its exposure to international business, is in the line of fire.”

Prices rose in just 10 out of London’s 33 local authority areas in November with steep year on year falls seen in the City, where they fell 5.7 per cent, Camden (down 4.6 per cent), Kensington and Chelsea (down 4.1 per cent) and Tower Hamlets (down 3.8 per cent.)

Today’s Land Registry data also revealed how the market has seized up ahead of Brexit with the number of completed deals in steep decline.

In September, the most recent month for which figures are available, there were just 59,691 sales across the capital, down more than 23 per cent on the 78,082 in the previous year.

Separate government figures published today showed the rate of inflation easing from 2.3 per cent to 2.1 per cent last month.