Average London home prices dropped by more than £11k in January

The average cost of a home in London fell by £11,073 to £530,396 in January from £541,472 in December, according to data from Britain’s biggest mortgage lender Halifax.

This meant the average London household lost more than £350 a day for the month as high borrowing costs and recession fears took their toll on the market.

The bearish means that prices were unchanged last January, suggesting that the London market will soon be in year-to-date negative territory. In December, prices were rising at an annual rate of 2.9 percent.

Nationally, prices rose more strongly than in London, with prices virtually unchanged in January at £281,684.

Kim Kinnaird, director of Halifax Mortgage, said: “We expected the housing market to slow down as the rising cost of living and the squeeze on household incomes from higher interest rates, particularly compared to the rapid growth of recent years. As we Going forward to 2023, this trend is likely to continue as higher borrowing costs reduce demand.

“For those looking to move up or down the housing ladder, there could be an improvement in confidence beyond the near term. Home affordability should improve over time due to lower home prices and the prospect of interest rates below levels anticipated last year.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “Annual value increases continue to slow, as activity softens and the market gradually returns closer to what we were accustomed to pre-pandemic.

“There is encouraging news on the mortgage front with fixed rate pricing continuing its downward trend and it is only a matter of time before it will be possible to fix it at less than 4 percent for five years.

“While the days of sub-1 per cent fixes are long gone, rates are starting to look more attractive to borrowers, which should be a welcome boost for the housing market and encourage more to take the plunge.”