The fall in central London house prices is accelerating as crippling stamp duty rates and Brexit fears bring the market to a near-standstill, official figures show.
Values were down year on year in five boroughs and the City of London in October, compared with just three local authority areas in September and only one in August, according to latest data from the Land Registry.
The biggest fall was in the City, where prices are now 8.8 per cent lower than last year, followed by Kensington and Chelsea, which has seen a 4.9 per cent annual drop.
Other boroughs with falling values are Westminster, Camden, Hammersmith and Fulham and Richmond. Areas where prices look likely to turn negative in coming months include Islington, where they are up just 0.3 per cent year on year, and Wandsworth, where they are 2.8 per cent above 2015 levels.
Across the capital, prices fell 1.2 per cent during October — the biggest monthly drop since May 2011. However, they are still up 7.7 per cent year on year, at an average of £474,475, because of big jumps in cheaper outer London zones such as Barking and Dagenham — where they soared by 18.2 per cent.
Today’s figures also show that the dramatic slump in sales that started in the referendum month of June continued right through the summer. In August just 6,607 deals were completed, almost 40 per cent fewer than the 10,881 in the previous year.
Estate agents have blamed the dramatic slowdown in transactions on uncertainty over Brexit and higher stamp duty rates levied on properties worth more than £1 million. There are growing fears that the collapse in deals will be followed by price falls in central London next year.
Howard Archer, UK economist at fore-casters IHS Global Insight, said: “The fundamentals for housebuyers look certain to deteriorate over the coming months, with consumers’ purchasing power weakening markedly and the labour market likely softening.”
Russell Quirk, founder of eMoov.co.uk, said: “It would seem London has taken a back seat when it comes to the driving force behind UK house price growth, having suffered a 1.2 per cent drop month on month, despite monthly growth creeping up by 0.1 per cent across the UK as a whole.
“The industry will really start to stutter to a halt as Christmas approaches, so any panic over falling house prices should be taken with a pinch of salt.
“Not only will buyer demand drop as thoughts turn to the stress of the festive season, but many sellers will freeze the marketing of their property, ready to hit the ground running in January.”