The fall in the London property market is gathering pace with house prices dropping at their fastest rate since the peak of the 2009 global financial crisis last month, latest figures show today.
Britain’s biggest mortgage lender Halifax said values were down by 2.6 per cent in June, leaving the average price in the capital at £533,057, a loss of around £15,000 over 12 months.
It was the fastest rate of decline of any UK region apart from the South East, where prices were 3 per cent down.
However, the long-feared full scale crash in London property prices has not yet materialised despite 13 consecutive increases in interest rates and the cost of average fixed mortgage deals passing the six per cent mark.
Kim Kinnaird from Halifax Mortgages said: “How deep or persistent the downturn in house prices will be remains hard to predict. Consumer price inflation is likely to come down in the near term... but core inflation is proving stickier than expected.
“With markets now forecasting a peak in Bank Rate of over six per cent, the likelihood is mortgage rates will remain higher for longer, and the squeeze on household finances will continue to put downward pressure on house prices.”
Commentators said the impact of higher borrowing costs has been a “slow burn” because the vast majority of mortgages are still on fixed rates.
Tomer Aboody of MT Finance said : “The market is keeping a stiff upper lip.”
Across the UK as a whole, house prices fell at the fastest rate since 2011.
