London house prices are decreasing

House price inflation has been slowing down in London, with average prices decreasing by 4.8% in the 12 months leading to December 2023, new data from the HM Land Registry shows.

This is the same for the whole UK as average house prices across the country decreased by 1.4% (around £4,000) in this same time period. 

Grant Humphries, mortgage and protection adviser at YesCanDo Money, said we are entering a recalibration phase in London’s housing market, but the challenges of complex lending conditions and the possibility of rising interest rates still need to be considered.

He said: “The end of 2023 saw a quieter market than usual, influenced by the base rate rises throughout 2022 and 2023, tempering activity and setting a more cautious tone. 

“Despite this, first-time buyers are in a promising position as the market opens up.

“Initial projections for 2024 painted a grim picture, yet the reality has unfolded more positively than anticipated, indicating a market that’s adjusting more smoothly than expected.”

London continues to have the highest average house price in England, with the number at £508,037 last December.

But this is a decrease of about £25,000 from the previous year. 

Average house price, by English region, January 2010 to December 2023

Leading City forecaster Samuel Tombs, chief UK economist at research firm Pantheon, said at the beginning of 2023 that there could be a 10% slump in property prices due to higher interest rates and buyers having to take out larger loans.

Overall the minor slump does not come close to the previous double-digit crash prediction for London’s property sector.

For anybody planning to buy or sell, Humphries recommends talking to an advisor as things are constantly changing.

He said: “In such transformative times, the value of professional, independent mortgage advice cannot be overstated.

“Collaborating with an expert provides clarity amidst change, offering strategies that are not only tailored to the current market landscape but also to individual financial goals.” 

Kensington and Chelsea was the most expensive area in England to purchase a property with average cost at £1.1 million. 

England as a whole had an average price of £302,000 at the end of 2022, which had decreased by 2.1% (around £7,000) over the 12 months to December 2023.

England’s prices still remain the highest in the UK, with Wales coming in second at just over £200,000. 

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