For the first time since 2012 average house prices across England have recorded an annual fall of 0.7%. This takes the average property in England down to £255,683.
This was driven by property values in London and the South East plummeting.
London house prices have fallen by 3.8% per cent annually in the first quarter of 2019 and this has been recorded as the fastest pace of decline since 2009.
So why has this happened?
Recent policy changes that have impacted the buy-to-let market in recent years are likely to have exerted to the drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.
In addition with several years of sustained out-performance, which left affordability more stretched was also a major factor to the recent falls.
So is the London property market in a correction?
“Monthly figures are starting to show a common theme, with positive growth in the Midlands and north of England and negative growth in and around London”.
March’s soft house prices is currently being hampered by challenging conditions, with buyer caution currently being reinforced by heightened Brexit and economic uncertainties – although there are significant variations across regions with the overall picture being dragged down by the weakness in London and the southeast.
What does the future hold?
This is likely to be the pattern for the foreseeable future, until the Brexit situation is resolved at least.
Generally, we would expect to see a spike in transaction levels at this time, as we enter the traditional spring bounce period. However with the extension to the EU leaving date, the bounce is looking more subdued.