London asking prices see biggest drop in six years
Published 19/08/2014 | 02:30
Asking prices for homes in London fell by the most in more than six years this month, adding to signs that the property market there is coming off the boil.
London values fell 5.9pc from the previous month to an average of €691,000 - the biggest drop since December 2007, website Rightmove said.
Nationally, prices declined 2.9pc - a record for an August.
While property demand usually weakens during the summer, Rightmove said the slump this year was steeper than expected.
Tougher new mortgage rules introduced by Bank of England Governor Mark Carney, pictured, as well as anticipation of higher interest rates, are putting pressure on the market after a surge in values raised concerns that a bubble may develop.
"Buyers and sellers are becoming increasingly aware about personal finances given that the cost of mortgages are going up and regulators are trying to bring availability down," said Miles Shipside, a director at Rightmove. "This limits what buyers are willing or able to pay and helps moderate sellers' price expectations."
Some of the biggest price declines were recorded in affluent boroughs including Kensington and Chelsea, Camden, Hammersmith and Fulham, according to the report.
Among the "million-pound plus" districts, Kensington saw asking prices drop 7pc on the month to an average £2.2m, while Camden fell 7.2pc. From a year earlier, values in Kensington were down 1.4pc, the only borough recording an annual decline. The average London price is up 10.3pc in that period.
"Top-end sellers are very much discretionary ones, so can delay marketing till a more active time of year," Mr Shipside said. "That tends to depress property prices more in the higher-priced boroughs, with those that need to sell in summer pricing lower to attract holiday-distracted buyers."