London house prices are falling for the first time since 2009

London is no longer the UK’s hottest property market.
London is no longer the UK’s hottest property market.
Image: Reuters/Eddie Keogh
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Since the middle of 2016, around the time of the Brexit referendum, the growth in London house prices has been in a steady slowdown. That slowdown has turned into an outright decline.

The UK capital is no longer leading the country’s housing market ever higher with double-digit price growth. In February, the average house price in London fell 1% from a year earlier, the first decline since September 2009. Meanwhile, every other region in the UK is experiencing property price growth of between 3% and 8%, according to the Office for National Statistics and Land Registry.

A drop in house prices and sales volumes in London’s wealthiest neighborhoods contributed to the decline. According to research by estate agents Knight Frank (pdf), properties worth between £2 million ($2.8 million) and £5 million have suffered the steepest price decline in the past year of 1.8%. Fulham, one of London’s wealthy enclaves, has been dubbed “ground zero” for the capital’s property decline. Buyers have been deterred by tax changes on expensive properties, while the Brexit vote has created uncertainty for the Europeans who live in many of these areas.

But first-time buyers won’t be celebrating just yet. The average house price in London is still £472,000, making these properties on average more than £150,000 more expensive than the next priciest region.