LONDON HOUSE PRICES FALL 3.7% AS REST OF UK CLIMBS

House prices in London declined by 3.7 per cent in the year to May, according to official figures from the Office for National Statistics, whilst the remainder of Britain recorded growth of 2.7 per cent. The average London property fell in value to £545,000, representing a decrease across the capital's housing market. Central London boroughs experienced sharper declines, with the City of London recording a 28 per cent fall from £872,000 to £627,000, and the City of Westminster declining by between 22.8 and 26.6 per cent depending on the measure used.

Property experts attributed the London slowdown to multiple factors. Higher stamp duty exposure in the capital, where four in five first-time buyers pay the tax compared to one in ten in the North, dampened demand. Increased mortgage rates following conflict in the Gulf region affected London buyers disproportionately because they typically require larger mortgages. Summer weather, World Cup distraction and political uncertainty surrounding Andy Burnham's premiership also contributed to reduced buyer enquiries, reported down by a fifth year-on-year. Kensington and Chelsea saw average prices fall from £1.406 million to £1.256 million.

Richard Donnell, executive director of Zoopla, predicted that property market activity would likely recover in autumn once political uncertainty resolved following Burnham's first Budget. Nathan Emerson, chief executive of trade body Propertymark, warned that uncertainty over the new administration's approach to property taxation could continue to weigh on consumer confidence in coming months. Jonathan Hopper, chief executive of Garrington, noted that elevated mortgage costs had limited borrowing capacity for London and South East purchasers.