London house prices took a hit in 2017
London was the worst-performing housing market in the UK last year for the first time in more than a decade, and may be stuck there.
Nationwide Building Society said values in the capital fell 0.5pc. That was the first full-year decline since the 2009 recession and lagged a 2.6pc increase for the UK as a whole.
It's the first time since 2004 that the city has ended the year as the slowest-growing region.
The weakness may persist in 2018, with property website operator Rightmove and the Royal Institution of Chartered Surveyors both predicting price declines in the city.
Nationally, values will increase on average, though Nationwide sees only about 1pc growth. That compares with a 4.5pc rate recorded in 2016.
The property slowdown is due to factors including an inflation squeeze, Brexit uncertainty and tax changes affecting landlords and owners of second homes. Bank of England data yesterday showed that approvals for mortgages were little changed in November and below the six-month average.
That's the same month the central bank raised interest rates for the first time in a decade, which added an additional headwind to the market.
In December alone, Nationwide said UK house prices rose 0.6pc from November, to an average £211,156 (€237,000), though monthly figures can be volatile.
London has taken the brunt of the slowdown after years of surging values that stretched affordability for first-time buyers. It's also been skewed by prime property, with some of the biggest declines seen at the top end of the market.
In a report, estate agent Savills said the downturn among the most expensive properties may be easing, but that it didn't expect an immediate return to growth. (Bloomberg)