London house prices fall as property market outlook deteriorates

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LONDON: London house prices fell for the first time in almost four years and the outlook for the city’s property market is fading, according to the Royal Institution of Chartered Surveyors (RICS).

RICS said its house-price index for the capital dropped below zero in September for the first time since January 2011, ending a record period of growth. A national index fell to 30 from 39, the lowest in more than a year.

The report, based on a monthly poll of surveyors, also showed that London may lag behind the United Kingdom market over the next year with price growth of 1%. Respondents expect the average national price to rise 2.1% in this period.

As Britain’s property market cools, London is being hit hardest by measures aimed at curbing reckless mortgage lending and the threat of a tax on the most expensive properties. A surge in values in the capital over the past year has stretched affordability and put potential buyers on edge.

“The growing sense of caution seems to have taken a particular toll on the London market,” RICS said.

The survey also showed that new buyer demand nationally slipped for a third month in September and was down for a fifth month in London. — by Fergal O’Brien, Bloomberg