LONDON house prices have fallen for the first time in EIGHT years.
AND prices across the UK rose by just two per cent – the slowest increase since June 2013.
Nationwide said prices in the capital fell by 0.6 per cent between July and September compared to the same time last year.
It’s the first time since 2009 that London has recorded a drop in its annual prices AND the first time since 2005 it’s been the weakest performing region across the whole of the UK.
East Midlands was the strongest performing region with prices up 5.1 per cent – the first time it has taken the top spot since 2002.
The South West was the second-best region, seeing prices rise by 4.8 per cent, followed by the West Midlands (4.6 per cent).
Overall, prices remained stable rising by 2 per cent – down from 2.1 per cent in August.
BUT this is the slowest rate of increase in four years.
Prices in London have become increasingly unaffordable, making it difficult for first-time buyers to get a footing on the property ladder.
Robert Gardner, chief economist at the building society, said the figures were a sign London prices were slowly coming back inline with the rest of the country.
He added that the squeeze on families income and a lack of wage growth was dampening demand despite low mortgage rates.
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He said: “House price growth rates across the UK have converged. London has seen a particularly marked slowdown.”
The Bank of England warned interest rates may have to rise – leaving young home-buyers facing hundred of pounds more in extra mortgage payments.
Despite the drop Londoners will stay pay much more for a home.
The average price for a property in the capital in a whopping £471,761 But the average house price for a flat or home across the UK is now just over £210,000.
How to get help buying a house
THERE are several government schemes available to help you get on the housing ladder.
- Help to Buy loan: This scheme is for those who have a 5 per cent deposit, and is only available on new-build properties that are worth less than £600,000. The government lends you up to 20 per cent of the property value (interest-free for the first five years) which gives you access to cheaper mortgages. You will need to pay this back at the end of the mortgage or when you sell.
- Starter Homes: First-time buyers under the age of 40 can access this new scheme. You’ll get a 20 per cent discount on the market value of the property (new-build only) but you cannot sell or let the property for five years after you buy it.
- Shared ownership: This scheme is available to non-homeowners who earn £80,000 a year or less (£90,000 in London). People can buy a share of a home from a housing association and continue to rent the remainder. Buyers will need a ten per cent deposit as well as money to cover stamp duty and other fees. You’ll also need to find a mortgage lender that is willing to lend on shared ownership properties
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