London house prices are finally falling, for the first time in three years.
That’s according to the Royal Institute of Chartered Surveyors (RICS), a trade group which gives a reliable early look at how more delayed official figures will play out. They ask thousands of property surveyors whether prices are up or down over the last three months. For the first time in three years, most in London are reporting a drop.
The average house price was an eye-watering 80.98% higher in July this year than at the post-crisis low in July 2008, according to official figures. The average price hit £514,000 ($832,900), over half a million pounds for the first time, according to the most recent official figures.
Despite the massive demand for property, London is the only part of the UK where prices are falling. The city was the region where prices picked up most quickly as the economy rebounded, and it’s now the first to hit a wall.
There’s only so far that house prices can surge without any wage growth. London is a global city, with huge demand from both young people moving from the rest of the country and also the rest of the world, but depressed earnings are going to hold back the number of people trying to buy:
The number of new buyers is going through the floor, while there’s an understandable increase in the number of people looking to cash in on the rapid appreciation in their home’s value. But they might have missed the peak: London is now the only part of the country where price expectations are now negative for the three months ahead.