House price growth slows in England and falls in London, Rightmove finds

House price growth in England and Wales slowed to its worst rate in nearly four years and London saw the largest annual fall in almost six, according to data from Rightmove released on Monday, which comes alongside what economists are seeing as a worsening consumer spending outlook.

House asking prices rose 2.3% year-on-year in the month to 11 February, down from the 3.2% rise in January and smallest since April 2013.

Rightmove also said the prices of property coming to market had grown 2.0% during the month, which was the smallest price rise at this time of year in almost eight years and compares to the average +5.0% February uplift over the previous seven years.

Rightmove said overall demand remained strong, though three-quarters of estate agents had reported markets have become increasingly price-sensitive, with home buyers reluctant to enquire if property is priced just a few percent too high.

“While the prices of goods in shops are rising at a faster rate, the pace of price rises in property coming to the market is slowing," conceded Miles Shipside, Rightmove director and housing market analyst.

He added: "perhaps we’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty."

Since April 2013, average house prices have risen 23% or nearly £60,000.

Looking at London, year-on-year figures showed a 0.4% fall, putting seasonal volatility aside, which was the largest annual decline since April 2011.

Houses in the capital’s most expensive borough, Kensington & Chelsea, saw a 14.6% annual fall with over £360,000 chopped off new seller asking prices.

However, as a whole, inner London enjoyed a 5.2% average rise versus a 0.1% fall in outer London, which was said to be the result of owners of more expensive properties skewing the average rise by deciding to come to market after the Christmas holiday.

An exodus from London could be due to Brexit combined to tighter lending conditions and higher taxes discouraging investors already facing expensive home prices in London, said analyst Ipek Ozkardeskaya at London Capital Group.

"London’s position at the heart of Europe and the European financial place is at risk after the UK decided to walk out the European Union.

"At this point, even a cheap pound could not revive appetite for London properties. As foreign businesses, investors face expulsion, the value of land in the UK’s capital city is also on a slippery ground."

Sector watchers said it was important to note that Rightmove’s data is based very much on asking price, not sold price.

This gives just a one month snapshot into one side of the property selling process, said Russell Quirk at eMoov.

"What it does tell us for sure, is that seller apprehension that remained prevalent throughout the back end of 2016, doesn’t seem to have quite subsided despite the market remaining strong. As a result, UK sellers seem to be adjusting their asking price in order to push through a sale in what they believe to be a weakened market."