London asking prices fall as house market cools

20 August 2007

The asking price for a house in London has fallen for the first time in 12 months, according to figures released today.

Property website Rightmove’s August House Price Index reveals that the average asking price for a UK home rose from £240,001 in July to £241,474 in August, an increase of 0.6%. The year-on-year rise was a strong 12.8%.

However, asking prices in London fell by 0.1% in the month compared to an average growth of 2% per month over the last year.

Rightmove sees the fall in London and the comparatively modest national increase as indicators of the market’s future direction.

Miles Shipside, Rightmove’s commercial director said: “This fall is the first we have seen for some time and is an early warning signal that even the buoyant London economy is susceptible to market forces.

“This much slower rate is consistent with prices and the market starting to adjust to the increased costs of home ownership. It finally paves the way for a return to a sustainable market without the need for further interest rate rises, though many buyers will still face affordability problems.”

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