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House prices fall again as London market continues descent

The decline in London can be linked to reforms to stamp duty and the Brexit vote.

British house prices slid again in March as the property market continues to cool, with London recording its weakest performance since 2009.

Average house prices in the UK decreased by 0.2% month on month, while in London they fell 0.7% annually, the capital’s lowest growth since September 2009, official figures show.

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Average UK house price (PA Graphics)

The Office for National Statistics (ONS), which compiled the data, said the decline in London can be linked to reforms to stamp duty and the Brexit vote, which has deterred foreign buyers and seen net migration to the city fall.

The statistics body said in a blog: “Halfway through that year, the UK voted to leave the European Union – this may have deterred foreign buyers, not only from the EU but also further afield.

“For Europeans, there has simply been a fall in demand as net migration from these countries has fallen.”

Figures also show that across the UK, the average house price was £224,000, marking a 4.2% increase on a year earlier.

The annual growth rate slowed from a 4.4% rise in February.

While London contains a tapestry of micromarkets – variously going up, down and sideways – the headline figure is a wake-up call for both sellers and buyers. Jonathan Hopper

London continues to be the region with the highest average house price, at £472,000.

In England, house prices increased by 4% over the year to March, reaching £241,000 on average.

Jonathan Hopper, managing director of Garrington Property Finders, said: “London is paying a painfully high price for its stellar run of price rises, and a correction is now under way in several parts of the capital.

“While London contains a tapestry of micromarkets – variously going up, down and sideways – the headline figure is a wake-up call for both sellers and buyers.”

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House prices: year-on-year change (to March 2018) (PA Graphics)

Within England, the east of the country showed the highest annual house price growth, with prices increasing by 5.8% in the year to March. This was followed by the East Midlands, which saw a 5.6% increase.

Wales saw house prices increase by 3.5% over the previous 12 months to reach £153,000.

In Scotland, the average price increased by 6.7% over the year to stand at £146,000.

The average price in Northern Ireland was £130,000, an increase of 4.2% over the year.

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