London Property Prices Falling Says Rightmove
Rightmove has claimed that asking prices in London have fallen this month as concerns over the affordability of homes in the capital deepen and more properties are put up for sale.
The property website declared that the market has come "off the boil", citing tougher mortgage rules and the prospect of rising interest rates alongside a 23% jump in the number of homes on the market.
London has been a particular concern among policymakers for the past year - with buyers forced to enter bidding wars for houses in a market lacking supply - conditions which have tipped purchasers into borrowing even more.
It was concern about loan-to-income ratios which prompted the Chancellor to agree new powers for the Bank of England to cap mortgages last week to help avoid the prospect of another market bust.
But Rightmove's report followed other recent studies which found evidence of cooling conditions.
It said that asking prices across England and Wales were at a "virtual standstill", rising by just 0.1% or £272 on the previous month to reach £272,275 on average.
While London recorded a 0.5% monthly decrease in asking prices, Rightmove said they were still up by 14.5% compared with June 2013 to now stand at an average £589,776.
The North West saw the sharpest month-on-month fall in asking prices, with a 1.8% slide.
Miles Shipside, director of Rightmove, said of the London market: "Some sellers will be looking to cash in and possibly get a lot more house for their money further out, but they may have missed the peak in the rush to realise their gains as parts of London appear to have hit the upper limit price buffer."
Mr Shipside said that while there has generally been a jump in property supply across the country, estate agents' stock levels are still "well below" those seen last year.
Rightmove said that, in addition to more houses on the market, stricter mortgage lending rules which came into force in April had already hit demand.
The rules mean that lenders have to question mortgage applicants in more detail about their spending habits, to make sure their home loan would be affordable, both now and when interest rates start to rise.
The governor of the Bank of England, Mark Carney, warned last week that the base rate - set by the bank's Monetary Policy Committee - could rise earlier than the market expects.