(Bloomberg) -- London's luxury property market is getting left out of the U.K.'s biggest housing rally in almost half a decade.
House prices in the city's most expensive districts slipped 0.1% between June and November, capping the largest annual drop since 2016, according to broker Knight Frank. Values across the U.K., however, last month posted the biggest such increase in four years.
While the national growth has been fueled by a tax break on sales and pent up demand after the Covid-19 lockdown in spring, London's prime property prices have slumped as international buyers stay away.
London's luxury rental market is also suffering, with average prices plummeting by 10.5% through November, the biggest fall since the global financial crisis, Knight Frank said. An oversupply of short-stay properties and a lack of visitors to the capital have combined to drag prices down, although the roll-out of a vaccine might help a recovery in 2021.
The broker forecasts 4% growth in house prices in the wealthiest central London areas next year, on the basis that any economic fallout from the pandemic will be more limited in high-end markets.
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