London house prices have fallen for the first time since the financial crash. An average home in the capital costs £471,761, which shows a 0.6% drop in comparison to last year. This should all be music to our ears, but with good news comes bad news.
Despite the drop in London prices, we’ve seen an increase in property prices throughout the rest of the U.K. In fact, London was actually the only region to experience a drop. Nationwiderevealed that average house prices around the U.K rose by 2.2%, however, the East Midlands saw a huge jump of 5.1%. Nationwide’s Chief Economist, Robert Gardner, said that ‘The lack of homes on the market is providing ongoing support to prices.’ So, is this just the next step in the housing crisis?
WATCH NOW: Cribs 2.0: The Girl Who Lives On A Boat
Buyers and sellers are inevitably nervous to make any quick decisions because of Brexit and the uncertainty that surrounds leaving the European Union. On top of this, the Bank of England is predicted to raise their interest rates soon which causes for more cautiousness. As well as feeling reluctant to buy and sell, most people are unable to even afford London prices which is why this perhaps long-awaited drop in cost has come about.
As CEO of Octane Capital Jonathon Sands put it, ‘The London property market has been a victim of its own extraordinary success.’
Despite still being the most expensive region in the U.K., the small decline gives hope to those wanting to, one day, get themselves onto the London housing ladder. But with the average price of a London house sat at over £470,000, we still have a long way to go.
We’re all too familiar with house prices rising faster than wages and earnings, a particularly large problem in the capital which supports the housing costs drop. If the gap between the north and south is now reversed, we could see a drastic need for pay rises across the entire country instead of just London.
London becoming the weakest performing region since 2005 can seem like a great prospect at first glance, however, the increase in U.K. property prices coupled with Brexit uncertainty and rising interest rates makes for an unpredictable future for the housing market. For those wanting, or needing, to get onto the property ladder, there seems a rough road ahead as we stumble into yet another chapter of the never-ending housing crisis.
Housing was front and centre of Jeremy Corbyn’s speech at the Labour conference, we’ll have to wait and see what Theresa May addresses during the Tory conference this weekend.
Like this? Then you might also be interested in:
3 Policies From Labour Party Conference You Need To Know About
Follow Eleanor on Twitter @eleanorlee_
This article originally appeared on The Debrief.