(Bloomberg) -- U.K. house prices recorded an annual drop for the first time in almost six years at the start of 2018, with London leading the slump.
Values fell 0.4 percent in January compared with a year earlier, according to a report published by Acadata on Monday. Detailed data covering the fourth quarter of 2017 show London down 4.3 percent -- the most since the depths of the recession in 2009.
“This is the eighth consecutive month in which the annual rate of increase has been declining, and now the dial is in the red zone,” said Peter Williams, Acadata chairman.
Despite efforts by the government to help first-time buyers, mortgage approvals fell to the lowest in almost three years in December and there are questions over the strength of demand. There could be further pressure on the market ahead, with some forecasting two Bank of England interest-rate increases in 2018. That would follow a hike in November, the first in a decade.
Comparing January to December, U.K. values rose 0.2 percent, the first month-on-month increase since September. That left the average at 301,477 pounds ($416,000). In London, the average is 589,553 pounds.
--With assistance from Mark Evans
To contact the reporter on this story: Fergal O'Brien in London at fobrien@bloomberg.net.
To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Brian Swint
©2018 Bloomberg L.P.
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