London house prices suffer worst month since 2008

London’s housing market suffered its worst month since 2008 as prices continue their downward trend, according to the Royal Institution of Chartered Surveyors (RICS).

In the latest RICS UK Residential Market Survey, 56% more respondents said prices had fallen in central London, making it by far the worst-performing region in the UK.

Central London is also the only part of the UK where price expectations are negative for the next 12 months.

The survey showed an increasingly mixed picture across the country. While London remains in negative territory, solid growth was being reported in Northern Ireland, the North West, Scotland and the South West.

Sentiment remained “modestly negative” in the South East, the North and East Anglia.

There has not been any growth in national sales since November last year, RICS said. Interest in house buying remains subdued, as does supply, the survey found, with average stock levels on agents’ book currently near an all-time low.

Buyer enquiries remained flat for the ninth straight month, while 4% more respondents saw a fall in new sales instructions.

Surveyors were also pessimistic about buy-to-let prospects, with 61% believing landlords would exit the market over the coming year compared to 12% who felt there would be a greater number of entrants.

Simon Robinson, RICS chief economist, said: “The latest results continue to suggest that the greatest pressure on both prices and activity continues to be felt in prime central London market.

“Although there are some signs that the wider South East is also losing some momentum, anecdotal evidence suggests the impact is very location specific. Meanwhile, the numbers for most other parts of the country point to a rather more resilient marketplace.

“It is interesting that over the medium term, the conclusion of the latest survey is that rental growth is likely to outpace increases in house prices. Although the Build to Rent offer is now stepping up a gear, there clearly is some doubt as to whether it can do so at a fast enough pace to address the shortfall which may result from the more hostile environment for buy-to-let investors.”

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