London home prices post largest drop in nearly 8 years

London home prices saw their biggest drop in April in almost eight years, as the capital continues to underperform compared to the rest of the country.

The average asking price in the city fell 1.5 percent year-over-year in April to $813,000, Bloomberg News reported. That was the biggest drop since May 2009. As a whole, the U.K. saw prices rise 1.1 percent.

The city’s housing market has been lagging behind the rest of the country since 2016, pushed down by unaffordable prices, the Brexit vote and tax increases on investors, according to Bloomberg.

The top end of the market is feeling the pinch, as more expensive homes near the city’s inner neighborhoods saw prices decline 4.2 percent on the year, while prices in the less expensive outer suburbs were up 1.7 percent.

“While the rest of the country enjoys a spring surge with most regions seeing a price boom and new price records, some parts of the London market are still re-adjusting,” said Miles Shipside, director of the real estate website Rightmove Plc. “The more discretionary upper end of the market is having to tempt buyers with cheaper asking prices, offsetting the higher purchase taxes.”

Last month, the share of London sellers slashing prices grew in 31 of London’s 33 boroughs. [Bloomberg] – Rich Bockmann