Rippling out:house prices fall in London commuter belt for first time in six years
The downturn in the London property market has spread into the commuter belt where prices have fallen year on year for the first time since 2012, a new survey reveals today.
The average cost of a home in the “Outer Metropolitan” region – covering dormitory towns such as Reading, Maidstone, St Albansand Woking – dipped 0.3 per cent to £364,309 in the 12 months to September, according to lender Nationwide.
Prices in the capital itself were also down – for the fifth quarter running – dropping by 0.7 per cent to an average £468,544 in the third quarter of the year.
The figures suggest that a “ripple effect”, starting with price falls in the most expensive neighbourhoods of central London and moving out to the suburbs and eventually beyond the M25 is well underway.
Nationwide chief economist Robert Gardner said that stretched buyers are now refusing to pay overheated prices in the Home Counties in a repeat of the pattern seen in London over recent years.
Prices in the Outer Metropolitan region are still 40 per cent above peaks before the 2007 banking crisis, compared with just 17 per cent for the UK as a whole.
They have been pushed up by first time buyers and some investors abandoning London to look for better bargains in the shires.
Buy or sell?
However most property experts said they doubted whether the falls would turn into a full-scale crash while mortgage rates remain close to historic lows and levels of employment stay high. However, some warned that a chaotic no-deal Brexit could lead to a short-term slump.
Jonathan Hopper, managing director of buying agents Garrington Property Finders, said: “For London house prices there may be light at the end of the tunnel. The only problem is no-one is yet sure if the light is a Brexit-shaped train.”
Sam Mitchell, chief executive of online estate agents Housesimple.com, said: “The UK housing market doesn’t live and die by what’s happening within the M25 and we should be encouraged by what’s happening beyond the capital.
“We also shouldn’t underestimate the importance of strong regional markets, because if we do leave the EU without a deal next March, it could be London that is the hardest hit.
“That’s especially true now the Government made the strange announcement over the weekend to punish overseas buyers by slapping them with higher stamp duty.”