London house prices fall at fastest pace since 2008 as slowdown continues

House prices in London fell at the fastest pace in almost a decade in August, but prices in other regions of Britain increased, a new survey released on Thursday (14 September) showed.

The Royal Institution of Chartered Surveyors (RICS) said its monthly snapshot of house prices rose to +6% last month, rebounding from a four-year low of +1% in July.

However, there were significant geographical variables to the recovery. Northern Ireland, Scotland, the North West and the South West all recorded positive movement, but the South East saw it fall further into negative territory.

In London, meanwhile, the balance is stuck firmly in negative territory, with 56% more respondents seeing a fall in prices, posting the weakest result since 2008.

Prices in the capital have quadrupled over the last 20 years but London has been hit harder than other regions by the slowdown experienced by the property market in the wake of the Brexit vote

Earlier this week, data released by the Office for National Statistics showed UK house prices rose by 5.1% in the year to the end of July, unchanged from the rate of expansion recorded in the previous month but down from a peak of 8.2% recorded in the month of the EU referendum.

While central London is the only area where prices are expected to decline over the next 12 months, the national three-month price expectation balance remained slightly negative in the South East as well.

"Although there are some signs that the wider South East is also losing some momentum, anecdotal evidence suggests the impact is very location specific," said RICS chief economist Simon Rubinsohn.

"Meanwhile the numbers for most other parts of the country point to a rather more resilient marketplace. It is interesting that over the medium term, the conclusion of the latest survey is that rental growth is likely to outpace increases in house prices."

Meanwhile, RICS added buyer enquiries were flat on the previous month and sales across Britain posted a negative balance for the ninth month in a row, coming in at -4%. The net balance of new sales instructions rebounded strongly, rising from -11% in July to -1% last month, which the RICS suggested could imply a stabilisation in the flow of fresh listings.

The survey also highlighted that despite a sustained period of deteriorating sales, agents books were near an all-time low at 43.2.