London only place to see average prices fall, down 3.6% YOY

Inner London boroughs and flats are accounting for much of London’s house price weakness, according to the latest e.surv House Price Index.

It found that London was the only region in Great Britain where average prices are falling, down 3.6% year-on-year in April. The decline is even worse in inner London, where prices are down 8.7% annually. That compares to a 2.6% fall in outer London.

Flats are driving the decline, 11.2% below their April 2020 level for inner London, although outer London flats remain 4.1% higher than five years ago.

Rob Owens, head of research at e.surv, said: “London’s price fall is not being felt evenly across the capital. The pressure is much more concentrated in inner London, particularly in areas where flats make up a larger share of the market. 

“Higher-value areas are more exposed to affordability constraints, and in inner London, that pressure is being compounded by a weaker flat market. Higher mortgage costs and softer investor demand are all weighing on pricing. 

“Outer London has softened too, but it has held up better than inner London. The split underlines how sensitive parts of the capital have become to price, property type and buyer profile. 

Scotland continues to outperform

Across the rest of Great Britain, it says average house prices rose by 0.2% over the month and 1.7% year on year to £327,800, and up 0.3% over the quarter.

As with other recent indexes, Scotland recorded the strongest annual growth at 4.4%. This was followed by the North West at 3.7%, Yorkshire and the Humber at 3.2%, and Wales at 3.0%.

Meanwhile, price growth was more limited in the south of England. The South East recorded annual growth of 0.4%, the East of England 1.0%, and the South West 1.4%.