London house prices drop—but still better than 12 months ago

HOUSE prices in London have dropped by half a per cent this month, the second monthly decline according to one property website. The average is just under �433,000, but still seven per cent more than January last year

By Mike Brooke

HOUSE prices in London have dropped by half a per cent this month, the second monthly decline according to one property website.

The average is just under �433,000, but still seven per cent more than January 2009.

Surprisingly, average price in Tower Hamlets which includes the prosperous Canary Wharf has dropped just under one per cent.

Yet London remains the most expensive place in Britain for first time’ buyers, says FindaProperty.com.

They need to raise three-and-a-half times their gross annual household income for a deposit on a mortgage, compared to the national average of one-and-a-half times.

Nigel Lewis, from FindaProperty, said: “The lack of supply continues to be an issue. But the London market is likely to continue recovering into 2010, although perhaps slower than last year.”

There was a fairly even split across London, with asking’ prices increasing in 16 boroughs since last month and falling in another 15, while unchanged in two.

Rises were moderate in East London, except for Tower Hamlets where the average dropped 0.9 per cent from December to almost �340,000.

Neighbouring Hackney’s average is up 1.5 per cent to just under �345,000, while Newham is up 1 per cent to just over �229,000.