London house prices fall at fastest rate in a decade

House prices in London fell in May at their fastest rate for almost a decade, according to official figures.

The Office for National Statistics (ONS) reported a 4.4% decline, on an annual basis, in residential property costs in the capital.

It marked the biggest fall since the 7% reduction recorded in August 2009 as the effects of the financial crisis took a hold on the sector.

The wider ONS figures showed a continuation of the slowdown across the UK as a whole - with prices increasing by 1.2% in the year to May, down from 1.5% in April.

The gradual decline - over the past three years - was first driven by London followed by the wider South East region.

However, house price growth in Wales - while sharply down from a 5.3% rate in April - remains positive at 3%.

The figure was 2.8% for Scotland.

The English region with the strongest rate of growth was the North West at 3.4%.

London saw a surge house price growth after the financial crash that saw prices almost double before cracks began to appear in late 2016.

They were a consequence of concerns about affordability after the boom and shaky sentiment since the Brexit vote.

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The ONS said that while London house prices fell over the year, it remained the most expensive place to purchase a property at an average of £457,000.

That sum is 6.7% down on the 2017 peak.

The North East continued to have the lowest average house price, at £128,000, and remains the only English region yet to surpass its pre-economic downturn peak, the ONS said.

There are signs of worse news for prices ahead.

The official figures lag other industry surveys which have already reported on activity during June.

A report by Rightmove earlier this week suggested that the current political uncertainty - as the clock ticks down to the extended Brexit deadline of 31st October - was continuing to weigh on sentiment.

It said average prices had fallen in the UK for the first time in 2019.

Rightmove's director and housing market analyst, Miles Shipside, said: "With record employment, low interest rates and good mortgage availability, buyers have a lot in their favour apart from the lack of political certainty.

"Those who have postponed their purchase should note that estate agency branches have more sellers on their books than at any time for the past four years, so there should be more choice of properties to buy."