London's house price slump has deepened as the market enters its traditional summer lull, with experts signalling a boon for prospective first-time buyers.
The average asking price of a house in the capital is down more than £11,000 compared to this time a year ago, marking the sharpest annualised fall since January.
The closely-watched Rightmove house price index, published this morning, also reveals that properties with two bedrooms or fewer tumbled 3.5 per cent, or £18,000, in July, compared to a year earlier. This is "the sector where first-time buyers are most active".
The findings, which also show that overall asking prices in London fell 0.5 per cent from June to July, are the latest in recent days to underline the growing evidence of a slowdown in the capitals property market.
Last week Big Four accountancy firm PwC predicted that London house prices were likely to fall as much as two per cent this year despite an expected rise in every other region of the UK.
Meanwhile, the Royal Institution of Chartered Surveyors (Rics) said that more surveyors have seen a decrease rather than increase in house sales for the last 16 consecutive months.
"The fourth quarter of this year and the first quarter of next year are going to be pretty bloody in the six months run-up to our actual divorce from the EU. People will be sitting on their houses until the dust blows over," housing expert Henry Pryor told City A.M.
However, today's findings show that the number of properties on the market jumped by 8.6 per cent in July compared with the same period in 2017, while there was no corresponding increase in the number of house buyers.
Rightmove said that “sellers are going to have to work harder to attract a buyer” with sales agreed by estate agents looking virtually flat (minus 0.2 per cent) against the same month in 2017.
Miles Shipside, Rightmove director and housing market analyst, said: "Its been well documented that the top end of the London market has been struggling for the past couple of years, but new seller asking prices in the lowest priced sector are now experiencing a larger percentage fall than these high-end properties."
Within London, the boroughs experiencing the sharpest price drops in July were Hackney (3.5 per cent, Ealing (3.4 per cent) and Hammersmith and Fulham (3.3 per cent).
Brian Murphy, head of lending for the Mortgage Advice Bureau, said: "This months report suggests that asking prices have flattened in many parts of the UK, partly as a result of the distractions of sunshine and major sporting events, but also as the disparity grows between what vendors believe their property is worth at first listing, and what the market will actually stand."
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