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Falling demand for flats in London driving prices lower across England

The price of flats in England are lower by -2.1% for the year driven by negative growth for this property type in London.

Data from the Office of National Statistics (ONS) reveals prices for flats in England are lower by -2.1% reducing from £224,796 last year to £220,146 to April 2019.

The fall in the price of flats and maisonettes in England was driven by negative growth in London for this property type as the capital accounts for around 30% of all these transactions.

The reduction in the price of flats and maisonettes is good news for first time buyers as they would require a lower deposit or smaller mortgage to get on the property ladder.

In contrast detached houses showed the biggest improvement increasing to 2.5% in the year with an average property value of £374,995.

Steep falls in London house prices

House prices in two-thirds of London boroughs have decreased over the year to April 2019 driving down the property growth for England.

The following table from the ONS shows average house prices and annual change for London homeowners to April 2019.
Region Monthly change Average price
Southwark £475,052 -8.3%
Haringey £511,543 -7.9%
Camden £814,375 -6.0%
Kingston on Thames £467,894 -5.3%
Barnet £516,750 -4.6%
Ealing £459,796 -4.4%
City of London £699,794 -4.4%
Harrow £445,636 -4.2%
Wandsworth £569,833 -4.2%
Islington £613,718 -3.7%
The largest fall was for Southwark reducing by -8.3% or £42,882 to an average property value of £475,052 and Haringey lower by -7.9% or £43,906 to an average values of £511,543 to buy a new home.

For home movers falling house prices gives you more time to raise a deposit as often the gap to your next home increases at a faster rate.

The slowdown in new purchases of flats could in part be due to fewer buy-to-let investors after changes to stamp duty and taxation allowance on mortgage interest, making it less attractive to buy.

A number of boroughs increased in value with Greenwich rising by 3.5% or £13,490 for the year with average values of £396,529 and Barking and Dagenham up 2.7% or £7,845 to an average value of £299,029.

For remortgage buyers living in these London boroughs the higher property values give them an opportunity to release capital which they can use to improve their home.

House price growth was lowest in London reducing by -1.2% over the year to April 2019 compared to a decrease of -2.5% to March 2019 although average property values in the capital are the highest for the country at £471,504.

Strong house price growth in regions

Across the UK house prices increased by 1.4% to an average property value of £228,903 with the strongest growth in Wales increasing by 6.7% for the year to April 2019 and average values of £163,902.

Northern Ireland was next with prices rising 3.5% in the last twelve months with East Midlands improving by 2.9%, followed by the North West up 2.6%.

Rising house prices allows the older equity release buyer to access the wealth in their property with a lifetime mortgage, using this for any purpose such as home and garden improvements or even buy a more expensive home.

The bank of England has stated that activity in the housing market has remained slow due to Brexit uncertainty, affordability constraints and changes in policy made to the buy to let market reducing demand.

Flats have been popular with first time buyers and buy-to-let investors and with lower demand mainly in London prices for flats or maisonettes are lower by -1.6% for the year with an average values of £199,018.

In comparison, detached homes has seen prices higher at 2.7% in the last twelve months and average values of £349,793 showing there is higher demand for family homes.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as maintaining your lifestyle or help your children start or expand a business.

Learn more by using the mortgage monthly cost calculators, property value tracker chart and equity release calculator. Start with a free mortgage quote or call us and we can take your details.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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