Asking prices drop with London property worst-affected, says Rightmove

Asking prices for homes are falling after the EU referendum, in which the country voted for Brexit, but the drop is in line with the normal seasonal trend as the property market slows in the summer.

Rightmove, a property listings website, said the average asking price in England fell 1.2% to £304,222 over the month in August. The average summer drop over the past six years is 1.2%, said Rightmove. Year-on-year, the average asking price rose 4.1%.

"Many prospective buyers take a summer break from home-hunting, and those who come to market at this quieter time of year tend to price more aggressively," observed Miles Shipside, Rightmove director. "This summer is also affected by both Brexit uncertainty and the aftermath of the buy-to-let rush in March to beat the stamp duty deadline."

The headline figure also masks regional differences. In two regions, the West Midlands and Yorkshire & Humberside, asking prices increased over the month. Moreover, the monthly falls in the East of England, North East and Wales were all significantly slower than the average for the whole of the country. But in London and the South East, asking prices were plummeting faster than the average.

London's month-on-month drop of 2.6% to an average of £619,409 is faster than anywhere else. "London has seen its price boom curtailed by punitive stamp duty and over-stretched affordability and has been in re-adjustment for a year or more, mostly affecting Inner London," Shipside said.

"At this time of year interest from buyers of more expensive properties that typify much of London and its commuter belt tends to tail off more, as they are often discretionary movers. Having waited for the referendum result, it now seems that some are also waiting until the summer holidays are over before reviewing their course of action."

Within London, there is a sharp difference in price activity between the boroughs. The average asking price in the City of Westminster, the worst-performing borough and one of the city's most expensive, dropped 14.5% over the month in August to £1,629,205. But Enfield, the best- performing borough and one of the cheapest, saw its average asking price rise by 4.5% to £492,283.

Brexit has sparked fears of a recession in the UK. Some firms are delaying or shelving investment as a result of the political and economic uncertainty. The Bank of England has slashed interest rates in response, a move which should boost demand in the housing market.

Asking prices by London borough: August 2016

Source: Rightmove