London is the only region in Britain where prices are falling, according to the latest e.surv House Price Index.
Average prices across London fell by 3.6% year-on-year in April, making it the only region in negative territory.
However, the headline figure masks a much sharper decline in inner London, where prices are down 8.7% annually, compared with a 2.6% fall in outer London.
The pressure is particularly evident in the flat market.
Inner London flat prices are now 11.2% below their April 2020 level, while outer London flats remain 4.1% higher than five years ago.
This points to a clear split within the capital, with higher-value, flat-heavy inner boroughs bearing the brunt of higher buyer costs and softer demand.
Rob Owens, Head of Research at e.surv, says: “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.
“Across Great Britain, prices are still rising, but growth remains modest.
“More affordable regions continue to hold up better, while London shows how higher borrowing costs are reshaping demand in the most expensive parts of the market.”
By contrast, the wider market remains in modest growth.
Average house prices rose by 0.2% over the month and 1.7% year on year to £327,800, with quarterly growth of 0.3%. The market is still moving forward, but at a more measured pace.
More affordable regions continue to lead performance. Scotland recorded the strongest annual growth at 4.4%, followed by the North West at 3.7%, Yorkshire and the Humber at 3.2%, and Wales at 3.0%.
These areas all have average prices well below the GB average, highlighting the role affordability plays in supporting demand.
Southern England remains more subdued.
The South East recorded annual growth of just 0.4%, the East of England rose by 1.0%, and the South West increased by 1.4%.
However, London stands apart as the only region where both annual prices and quarterly prices are falling.
This article is taken from Landlord Today