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London house prices fall 5.3%

Monday, 18 August 2008 12:41 AM

Property prices in the formerly prosperous London market have shown dramatic falls over the last month.

According to new research from Rightmove.co.uk, average prices in the capital fell by an average of 5.4 per cent in July, a trend which is beginning to undermine substantial gains made over the last year.

As a result of the recent falls, London now finds itself in negative year-on-year territory for asking prices, down 3.8 per cent. This brings it into line with the surrounding south-east, which saw prices down by 3.7 per cent.

"Londoners have so far been largely insulated from the price falls taking place elsewhere in the country," commented Miles Shipside, commercial director of Rightmove.

"However, sellers who choose to come to the market during the peak holiday season generally have a greater need to sell, and as a result properties coming onto the market in July were on average over £21,000 cheaper than last month."

Every borough in London saw a month-on-month fall in asking prices in July, and all but six now have prices lower than a year ago, finds Rightmove.

Among the worst fallers was Wandsworth, where an average property attracted an asking price of £521,653 a month ago. This has now fallen 7.9 per cent to £480,555, illustrating extreme volatility in the market.

Brent saw comparable falls of 7.5 per cent, Kingston-upon-Thames was down 7.2 per cent and Richmond-upon-Thames fell 6.8 per cent.

However, evidence suggests the areas proving to be most resistant follow the route of the Olympic-linked East London Line extension, which will open in 2010. New sellers coming to the market are still seeking prices higher than a year ago in Tower Hamlets, Hackney, Islington, and to a lesser extent, Southwark.

"Areas that are about to benefit from improved transport links appear to be avoiding the worst of the storm that is setting in elsewhere in the capital," explained Mr Shipside.

"Perhaps those looking for ongoing price growth, or some insulation from the worst of the falls, should take up transport detective work as a hobby."

Chris O'Toole

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