House prices fall – even in London

London property prices have fallen for the first time since December last year, marking a slight narrowing of the north-south divide.

Property prices in London fell 0.2% in November, the first time prices in the capital have registered a month-on-month fall since December 2011, according to Hometrack Monthly House Price Survey.

Prices in central London fell even further, registering a 1.2% drop.

The fall in the capital is in line with a continued slowing of the housing market which is coming into a seasonal lull. The number of new buyers registering with agents dropped -0.8% and property listing fell 0.6%.

House prices fell by -0.1% for the fifth consecutive month in a row and are down 0.3% over the past 12 months.

However, a slowing in London does mean the performance of housing markets in the north and south of the country is narrowing slightly. The gap between the asking and achieved prices is closing in northern regions and the slowdown in demand in the past five months has been less pronounced in the north.

Overall, sellers are achieving 93.2% of their asking price and are waiting an average of 9.8 weeks for their property to sell.

House sellers in the south are struggling with a fall in demand, which has reduced upward pressure on prices. However, pricing in the north of the country remains highly sensitive to changes in demand and the average time to sell remains extended.

House price falls were registered across all regions of the country in November except in East Anglia, where they remain unchanged.

Richard Donnell, director of research at Hometrack, said: ‘After a strong start to the year prices continue to drift lower. However, the slowdown in the housing market over the final half of 2012 has been less pronounced than that seen over 2011 despite pressure on household incomes.

‘Tightening supply combined with low levels of new housing have been an important support to pricing levels nationally.’

Donnell was cautiously optimistic about the housing market thanks to lender innovation and new government lending initiatives.

‘Looking ahead, mortgage availability and consumer confidence continue to be important drivers of the housing market in the short term,’ he said.

‘While the economy has grown by 1% in the third quarter of the year the Office for National Statistics warned that early date from the fourth quarter appears to be less encouraging.

‘On a more positive note, mortgage lending figures showed gross lending to be up – by as much as 4% on October last year. This reflects a general increase in the number of competitive products being offered by lenders at both low, but in particular, high loan-to-values.

‘Improvements in European funding conditions and tentative signs of the government’s Fund for Lending scheme are beginning to have an impact.’