The price of homes in London has finally started to drop (Picture: Dinendra Haria/SOPA Images/LightRocket via Getty Images)
London house prices fell by an average of £11,000 in the first month of 2023, according to new data.
The average value of homes fell by roughly £11,073 from £541,472 to £530,396 in January compared to the month before.
According to new data from Halifax, properties across the capital were losing an average of £350 off their price tag a day.
Kim Kinnaird, director, Halifax Mortgages, said that the trend of higher borrowing costs hitting demand is expected to continue in 2023, adding: ‘We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years.
‘As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.
House prices fell on average £11,000 in the capital (Picture: EPA)
‘For those looking to get on or up the housing ladder, confidence may improve beyond the near-term.’
London has been under-performing other regions in the UK in recent months.
But it’s expected that lower house prices and the ‘potential for interest rates to peak below the level being anticipated last year’ will lead to improvements in affordability.
Average house prices in London over the last 6 months
Here’s how average house prices have steadily fallen over the last 6 months in London:
August 2022: £552,755
September 2022: £544,113
October 2022: £541,720
November 2022: £542,311
December 2022: £541,472
January 2023: £530,396
(Data from Gov.uk)
Mark Harris, chief executive of mortgage broker SPF Private Clients, added that he does expect the market to return to pre-pandemic levels ‘gradually’ as activity softens.
He said: ‘There is encouraging news on the mortgage front with fixed-rate pricing continuing to edge downwards and it’s only a matter of time before it will be possible to fix for five years at less than 4 per cent.
‘While the days of sub-1 per cent fixes are long gone, rates are beginning to look more palatable for borrowers, which should be a welcome boost for the housing market and encourage more to take the plunge.’
Things are looking more stable in other parts of the country after a four month fall at the end of 2022.
In fact, annual growth has reached its slowest in over three years.
House prices outside the capital remained at a similar level in January, with the average property price around £281,684 compared to £281,713 in December.
In December, the UK’s most expensive streets were revealed. Phillimore Gardens in Kensington, west London, came out on top where the average house price will set you back £23.8million.
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House prices soared in 2022.
