Asking prices for homes in some parts of London have recorded their greatest annual fall so far this decade, dropping on average by £18,000 in a month¹. The typical price of property coming to market in London now stands at £611,000, yet the readjustment is attracting motivated buyers.
The price drop was primarily driven by the softening market in London's most expensive, or prime, boroughs, while prices continued to rise in the city's most 'affordable' boroughs.
House price growth in the capital has been cooling for several months now, with Rightmove's monthly index showing asking prices in the capital have dropped by 2.9% since August thanks to weaknesses at the top end of the market in boroughs such as Kensington and Chelsea (where prices have fallen by 10.2% year-on-year) and Camden (where prices have fallen an average 6.9%).
The royal borough is now a little more affordable because the typical asking price for a newly-marketed home there currently stands at £1.8m, compared with the £2.1m that a typical new seller was asking for in August.
The highest value markets of prime central London continue to be adversely impacted by the stamp duty effect, which largely explains why prime London residential values have seen the greatest price adjustments. Yet despite a backdrop of political uncertainty, lower asking prices are helping sales volumes to pick-up, with committed sellers understanding the need to consider these factors in their price expectations.
While affordability constraints are a major factor in the slowing pace of price rises, demand for the right property at the right price remains high with the numbers of sales agreed by estate agents in London up by 5.6% on a year ago.
In contrast to some of the more expensive parts of the city, buoyant demand for properties in London's trendier and more affordable boroughs, such as Hackney and Bexley, has seen asking prices rise by 9.5% and 7% respectively. Prices in Southwark are said to be up £58,000.
¹ Source: Rightmove