London house prices 'drop'

London property prices have showed signs of slowing down, with the first drop for some time sending out mixed messages to the home-buying and rental markets.

Figures from the Land Registry showed house prices in the capital dropping by 0.6 per cent over October, which reversed September's 1.3 per cent growth and cast doubt over where London prices were headed.

The slowing of the London housing market meant that prices in the capital were outperformed by other regions of England and Wales for the first time in ten months – but house-buying still remains out of the reach of many Londoners.

According to the Land Registry, houses across the UK could now be bought at an average of £184,346, but the small drop in London prices still left the capital with a £351,039 average house price tag.

With prices still so high and the future direction of property prices now unclear, many find that renting is a better option as they establish themselves in London.

The drop in London prices was attributed in some degree to the drop-off of top-end property demand from the highest income brackets, as the 'credit crisis' took its toll on city bonuses and willingness to shell out in expensive areas.

News posted on 30th November, 2007