Prices throughout the UK falling with just some tiny pockets of property in London bucking trend

But overall in the UK property prices in all regions of the UK have fallen this month with values dropping by the most in 18 months, according to another index published today (Monday September 27).
 
The latest quarterly index from consultants Savills suggests that the London prime market has slowed but annual growth is still 9.1% with values now 7.9% below their peak.
 
Prices are at a virtual standstill with the Savills index recording 0.1% growth between July and September with small falls in some key central locations.
 
The figures show that some parts of London are doing well, most notably Kensington, Holland Park and Notting Hill which saw prices rise 2.1%. But Knightsbridge, Chelsea, Belgravia, Mayfair and Marylebone saw values fall 0.9%.
 
‘The froth that was evident in 2009 and early 2010 has definitely come off the prime London residential market in the last six months. But continued activity from overseas buyers, still enjoying an exchange rate advantage, and domestic buyers, notably including those in the financial sector, has prevented unsold stock levels rising as they did in the wake of the credit crisis,’ said Yolande Barnes, head of Savills residential research.
 
It is this continued transactional activity that has supported prices and separated the prime markets of London from both the mainstream, which has seen further price falls in the quarter, and the prime markets outside of the capital where transaction levels have fallen and a clear buyers’ market is emerging,’ she explained.
 
‘We have a combination of factors, including the return of some city money to the central London market, that is cushioning values. The stability of prices has accompanied a recovery in the value of equities in the third quarter, and the impact of the economy on the wealth and sentiment of buyers will continue to dictate activity levels and price movements over the next 18 months,’ she added.
 
But it is a different story in the rest of the country. The Hometrack index for September shows that the average cost of a property fell 0.4% from the previous month to £157,600, the third consecutive monthly drop and the biggest since March 2009. Housing demand has fallen the most since January 2009.
 
Prices rose in September by 1% from a year earlier, the least in seven months, Hometrack said. Demand for homes, measured by the change in new buyers registering with real estate agents, fell for a third month, dropping by 2.9%.
 
Prices fell in all regions for the first time since April 2009. The decline in demand has been strongest in southern England, which experienced the largest price drops in the last three months. Prices fell 1.1% in London and 1% in southeast England in that time, the index shows.
 
September’s price declines are part of an ongoing re-pricing process which began six months ago in early spring, and which is set to stretch well into 2011, said Richard Donnell, Hometrack’s director of research.
 
‘Growing concerns over the economic outlook and public spending cuts are weighing heavily on would be purchasers,’ he explained.
 
However he believes that a surge in the supply of homes for sale should slow and help limit price declines in the next year. ‘While demand is set to fall further in the coming months, we also expect the volume of new supply coming to the market to moderate,’ Donnell said.
 
‘Talk of a double dip, with the implication being that the market will see double digit house price falls, is overdone despite the weak outlook for demand,’ he added.