London home prices plummet the fastest in 10 years

Steepest decline since the global financial crisis

Blocks of flats in London. Ruben Pinto/Shutterstock

The average price of a residential property in London sank 4.4 percent in the year to May, the steepest decline in a decade, according to the Office for National Statistics’ latest UK House Price Index.

The decline outpaces annual falls since August 2009 when home prices in the British capital plunged seven percent at the height of the banking crisis. It also dwarfs the yearly decrease of 1.7 percent in April 2019.

A slowdown in the south and east of England has driven general malaise in UK house price growth over the last three years, the agency explained. While home prices for the UK moved up 1.2 percent in the year to May 2019, the growth lags behind the annual rise of 1.5 percent recorded in April.

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Home prices in London have posted annual declines since March 2018 but the city still has very low affordability levels.

A property in London would set back by buyers by GBP457,000 (USD570,000) on average, making it the most expensive region for buying a home in the UK, the agency stated. The South East and the East of England follow London as the most expensive regions for purchasing homes, at GBP324,000 and GBP291,000, respectively.

The average home price in the UK stood at GBP229,000 in May, up GBP2,000 from the same period in 2018.

The North East region commanded the lowest average home price in England at GBP128,000, which is still below its peak before the economic downturn.