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Photographer: Chris J. Ratcliffe/Bloomberg

London House Prices Extend Decline as Demand for Property Wanes

London House Prices Extend Decline as Demand for Property Wanes

  • U.K. home sales activity declines for 16th month, RICS says
  • Activity indicators suggest London will remain in a rut
Faraday House residential apartments, right, stand next to Scott House, in the Circus West Village development of the Nine Elms district of London, U.K., on Wednesday, May 23, 2018. Traditional lenders are charging more for loans or declining to offer money at all after a boom in prime properties ended and left builders with a record number of homes without buyers.
Photographer: Chris J. Ratcliffe/Bloomberg

London house prices extended their decline last month amid slumping demand in the capital, according to the Royal Institution of Chartered Surveyors.

For a sixth month, significantly more real estate agents reported falling prices than rising ones, albeit at a slightly slower pace than previously, RICS said is a report Thursday. On a national level prices remained broadly flat, the firm said.

London Suffers

British house-prices are weakening after a three-decade boom pushed them to levels that are unaffordable for most. Slower economic growth and the decision to leave the European Union have further dented demand for homes, especially in London.

The number of people looking to buy an apartment in London was little changed last month, and respondents to the RICS survey expect the subdued interest to persist in the second half of the year. Nationally, the number of sales declined for a 16th month.

“It’s hard to see what is going to provide much impetus for activity in the housing market in the near term,” said Simon Rubinsohn, chief economist at RICS.

Changes to tax rules may have had unintended consequences for the private rented sector, Rubinsohn said. “While it is understandable that the government wanted to provide a lift for first time buyers, this may well come at the cost of higher rents as the appeal of buy-to-let diminishes.”