London set to lead housing market drop as prices in the capital fall 0.6%
House prices in London fell for the first time since before the pandemic – and analysts warn the rest of the country may be ‘doomed to follow’.
The Office for National Statistics (ONS) said a typical home in London cost £528,000 in June, down 0.6 per cent, or just over £3,200, on the same month last year and the first time prices in London have fallen on an annual basis since November 2019.
It was the first decline in any region of England since May 2020 when prices in the North East fell.
Across the UK, prices rose 1.7 per cent in the 12 months to June to £288,000. They remain £5,000 higher than a year earlier but £5,000 below the recent peak in November 2022.
House prices: The Office for National Statistics said a typical home in London cost £528,000 in June, down 0.6%, or just over £3,200
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: ‘London is setting a fashionable trend that the rest of the UK may be doomed to follow.
‘The outlook for coming months looks fairly grim.’ Rising interest rates have slammed the brakes on as homeowners and buyers face soaring mortgage costs.
The North East was the best performing region – the value of a home up 4.7 per cent to £161,000.
Prices rose more than 3 per cent in the North West and West Midlands, and more than 2per cent in the East Midlands and Yorkshire and The Humber.
The weakest growth outside the capital came in the South West, which was up just 0.5 per cent, followed by the East at 1.1 per cent and the South East at 1.3 per cent.
The average two-year fixed residential mortgage rate stood at 6.77 per cent yesterday.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: ‘A typical two-buyer household will see around 28 per cent of their real income go towards repayments, much higher than the 20 per cent in the 2010s.’
- Rents in the UK rose by a record 5.3 per cent in the 12 months to July, according to the ONS.
Marshalls sheds 250 jobs
Marshalls has cut around 250 jobs as a slowdown in the housing market hits demand for paving stones.
The landscaping and roofing specialist said profits in the first half of the year fell 30 per cent to £16.7million. Revenues were up 2 per cent to £354.1million.
Chief executive Martyn Coffey said the job cuts were due to ‘challenging’ conditions in housebuilding and home improvements.
‘The challenging trading is expected to persist in the second half and into 2024,’ Marshalls said as it cut the interim dividend from 5.7p last year to 2.6p this time around.
Its shares fell 0.2 per cent, or 0.4p, to 257.6p