London property prices fall for first time in eight years

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The fallout from Brexit has hit London's property prices, which have fallen for the first time since 2009.

In its latest survey, mortgage provider Nationwide found that average home prices in London fell by 0.6 percent in the third quarter of this year when compared to the same period in 2016.

That was the first year-on-year decline in the index for London since the third quarter of 2009.

Estate agents' "for sale" boards stand outside a residential building in London on August 13, 2017. /VCG Photo

However, Nationwide also said that average prices across Britain rose 2.2 percent over the same period from a year earlier.

"Low mortgage rates and healthy rates of employment growth are providing some support for demand, but this is being partly offset by pressure on household incomes, which appear to be weighing on confidence," the lender said in a statement.

The average price of a home in London was 472,000 pounds (632,000 US dollars) in the third quarter, more than double the national average of 211,000 pounds, according to Nationwide.

British households' purchasing power has taken a hit because of the rising cost of imports after last year's referendum vote to leave the European Union, which pushed down the value of the pound.

British salaries fell by 0.4 percent between May and July compared to the same period a year earlier when adjusted for inflation, recent official data showed.

Britain's property market could also suffer if the Bank of England were to raise its main rate from a record-low of 0.25 percent, which would push up the cost of mortgages.

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Source(s): AFP