At long last, things are looking up (ever so slightly) for aspiring homeowners in London. We rejoiced when we found out that asking prices for homes in the capital dropped recently – and now we're doing another little dance in our chair.
London house prices have fallen for the first time since 2009 in the aftermath of the financial crisis, according to new figures from Nationwide. Prices dropped by 0.6% from 2016 levels in the third quarter of this year, taking the average price of a home to £471,761, The Guardian reported.
The bad news, however, is that prices everywhere else in the UK are still on the rise. Nationally, the average house price increased by 2.2% to £210,982, with prices in the East Midlands climbing the most to £177,825 (up by 5.1%) and the South West and West Midlands seeing the second and third largest price hikes. London remains the priciest place in the UK to buy a home, however.
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The trend suggests that "house price growth rates across the UK have converged in recent quarters,” according to Robert Gardner, Nationwide’s chief economist, with yearly growth rates in the south of England becoming more similar to those seen in the rest of the country. "London has seen a particularly marked slowdown, with prices falling in annual terms for the first time in eight years.”
House prices across the UK remain relatively high because of the chronic lack of properties on the market, low mortgage rates and high unemployment, Gardner added. But this is being offset by pressure on household incomes as wage growth has stalled.
House prices have grown faster than earnings across the UK since the financial crisis, but the gulf between the two has been by far the largest in London and the South East. In the capital, the ratio of average house price to average earnings climbed from 7.8 in 2009 to 12.9 last year, the Financial Times reported. And don't we know it.