House prices in London are falling by £71 a day, as the property market in Britain’s priciest city continues to slow down.
That’s according to new data from the property portal Zoopla, which claims that across Britain, values increased by £11 a day in the first half of the year.
Here, we explain the implications of falling prices for homeowners and buyers in the capital.
West Midlands enjoys price boost as London falters
New research by Zoopla claims that house prices in Britain increased by an average of £2,046 in the first half of 2019, the equivalent of £11 a day.
The West Midlands was Britain’s best performing region, with houses rising in value by £6,695 (£37 a day).
Next in line was the South East of England, which saw increases of £6,463 (£35 a day). Rising prices in the south east could reflect increased demand, as people working in London look further afield for better value when buying a home.
At the other end of the scale, houses in London fell in value by £13,035 (£71 a day), while properties in Scotland recorded losses of £3,768 (£21 a day).
|Region||Change in value: Jan-June||Change per day (£)|
|Yorkshire & Humber||£2,263||£12|
|East of England||£2,116||£12|
London price drops: best and worst areas
In a year dominated by Brexit uncertainty, fewer people have been buying and selling property.
And it’s perhaps no surprise that Britain’s most expensive property market is feeling the effect most keenly.
Not all areas in London are getting cheaper, however. Like elsewhere in the country, house prices can vary by suburb, postcode or even from street to street.
Zoopla’s research shows several areas of West London bucking the trend and enjoying significant price rises, as shown below.
Biggest price increases in London
|Area||Change in value: Jan-June||Change per day (£)|
|Notting Hill (W11)||£25,888||£144|
|Shepherds Bush (W12)||£16,594||£91|
The biggest drops recorded so far this year have been in the affluent areas of Hampstead and Belsize Park, areas that are home to the likes of Sting and Ringo Starr.
There’s bad news too for football hero Gary Lineker, as his properties in Barnes in South West London fell in value by £91 a day.
Biggest price drops in London
|Area||Change in value: Jan-June||Change per day (£)|
|Hampstead/Belsize Park (NW3)||-£32,808||-£179|
|South Woodford (E18)||-£15,136||-£83|
Why are prices falling in London?
Zoopla’s data paints a concerning picture for homeowners in London, but it’s important to put this in a wider context.
Land Registry data shows that in the last five years, the average house price in London has risen from around £383,000 to £457,000 – an increase of 19%. The modest fall in values recorded this year, equivalent to just 1.94%, is therefore hardly a genuine reason to panic.
Property markets have peaks and troughs, and periods of economic uncertainty (such as referendums and general elections) can result in fewer people moving, meaning house prices are more likely to rise and fall sharply in certain areas.
The key message is that it’s best not to get too hung up on monthly house price indices, as it may well be that in a year’s time the market will be significantly different.
Are London’s commuter towns flourishing?
Zoopla’s data paints a mixed picture for some of London’s more popular and affluent commuter towns.
You might think that prices dropping in London mean they’ll be soaring outside of the city, but that’s only partly the case.
The towns with the three biggest price increases in Zoopla’s report – Berkhamsted, Reigate and Epping – are all popular commuter areas.
If you’re hoping to bag a bargain in the leafy suburbs, you might have missed the boat. Zoopla’s data shows properties in Berkhamsted gained £33,875 in value in the first half of the year – that’s £185 a day.
But with the Berkhamsted boom comes the Surrey slump. The two worst performing towns for growth in the whole of the UK were Leatherhead and Weybridge. House prices in these popular areas fell by around £16,000, or £89 a day.
Where should you buy a home?
If you’re working in London and are considering getting on to the property ladder, you’ll need to look far and wide for the best value. However, that doesn’t necessarily mean leaving the capital entirely.
Let’s take a look at your options.
Buying a home in London
The average property price in London (according to the Land Registry) is £457,000, but this number isn’t particularly useful.
That’s because house prices in London vary massively, from below £300,000 in Barking and Dagenham to more than £1.25m in Kensington and Chelsea.
The London Help to Buy scheme allows you to get a loan for 40% of the value of the property from the Government, in addition to your mortgage, albeit with certain restrictions. This can make parts of the capital more affordable for first time buyers.
- Find out more: buying a home in London
Buying a home in a commuter town
As we mentioned earlier, many Londoners are moving away from the capital in search of cheaper property prices.
You will, of course, need to factor in the commuting costs from your town of choice, and consider the quality of public transport services into the city.
Also bear in mind that the Help to Buy scheme outside the capital will only give you a 20% loan.
You can find out the average house prices in some of London’s most popular commuter towns below.