Annual growth in the capital dropped to 2.4% in May 2015 – down from the heady times of summer 2014 when London prices rose by 20.7% year-on-year.
London’s annual growth has now been taken over by the North West, South West and the East Midlands, while prices in the North are also accelerating fast (2.3% in March to 3.6% in April).
Not every London borough is slowing down however, as prices in Newham, Bexley and Barking & Dagenham are some of several areas showing double digit house price increases.
Richard Sexton, director of e.surv chartered surveyors, said: “On a monthly basis London house prices have dropped for the third successive month since the start of the year. It is the higher-priced boroughs which have seen the biggest price falls, as a side effect of costlier Stamp Duty on top-end properties.
“This falloff at the top tiers of the market has cooled activity levels too. Home sales in London have dropped 16% year-on-year in the three months to April 2015 – the most significant drop-off of all regions. But this belies a much more dynamic market at the lower end. “
For England and Wales as a whole house prices have increased by 4.5% annually and 0.4% monthly – while the average price reached £277,178 in May.
Home sales have fallen by 14% year-on-year over the period.
Sexton added: “In the short-term, the general election did ruffle some feathers, but as we return to smoother ground, it’s becoming clear that there’s a more structural problem holding back the market – and that the lack of properties on the market is starting to choke off activity.
“This will need urgently addressing, as with the current momentum in the economy, and the government pumping up demand via commitments to starter homes and support for first-time buyers; price rises will only speed up if housing supply doesn’t put pedal to metal.”
