London home prices hit six-year low in December

Weakness in prime areas in the city is driving the fall, which could continue well into 2017

London homes (Credit: Fin Fahey via Flikr)
London homes (Credit: Fin Fahey via Flikr)

London home prices are falling down. According to U.K.-based property website Rightmove, home prices in England’s capital city have reached a six-year low in December.

Asking prices in the city have fallen 4.3 percent month-over-month to £ 616,160, or $775,500, Bloomberg reported. Inner London has dropped 6 percent, and Rightmove predicts prices in the city will decline 5 percent next year.

The report also found demand in London — which is measured by sales agreements — dropped 7.2 percent year-over-year.

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Though average prices across inner-London dropped 2.6 percent, outer areas jumped 2.7 percent, which leveled out the average prices across the city. That disparity partly reflects the luxury end of the market, where an April tax increase on property investors and concerns about Brexit are weakening demand.

“Alongside the seasonal slowdown, the readjustment of prices to match buyers’ greater reticence continues, especially in more expensive inner London,” Rightmove’s director Miles Shipside told Bloomberg. “Buyers are being put off the really big-ticket purchases.”

In the quarter following the Brexit vote in June, London house prices fell 14 percent year-over-year.  The vote had raised New York City brokers’ hopes that international investors would flock to New York City[Bloomberg] — Miriam Hall