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Sharpest fall in London house prices since financial crisis

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UK house prices have risen at their slowest rate for six-and-a-half years, but the regional differences are stark
Sharpest fall in London house prices since financial crisis

There’s a notable divergence in the performance of regional housing markets, according to Halifax.

It said that prices remain under most pressure in the south of England, with outright falls seen across Greater London (-1.7%), the South East (-1.3%) and Eastern England (-0.5%) during the third quarter of 2019. The decline in London was the sharpest since the third quarter of 2009, whilst prices in the South East have now fallen on an annual basis for three quarters in a row.

Rising prices

Wales continued to perform strongly, with price inflation of above 6% for the third successive quarter. Scotland also enjoyed robust price rises of 4.3%, whilst prices in the North West increased by 4.2%. Property price inflation in the Midlands (both East and West) remained above the national average.

Most expensive

Despite falling house prices across the south of England, the cost of property there remains the highest in the UK. This is especially the case in London, where prices remain above £480,000, and nearly £160,000 higher than in the South East (£323,055).

At the other end of the scale, the North East (£137,380) and Northern Ireland (£143,949) are the cheapest places to buy.

Paul Smith, economics director at IHS Markit, which produces the index for Halifax, said: “The UK housing market remained fragile during the third quarter of the year and is on course to record its worst performance since 2012.

“Despite the low mortgage rate environment and rising earnings growth helping to ease affordability constraints, UK-wide house price inflation sank to a six-and-a-half year low.

“Given the close relationship with wider macroeconomic trends in recent years, we suspect that political and economic uncertainty associated with Brexit continues to weigh on the market. This is especially the case in the south of England, where prices are falling and, in the case of London, at the fastest rate since the height of the financial crisis.”

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