London home prices fall for first time since 2011

LONDON — Home prices in London, popular with overseas investors including Singaporeans, fell in September for the first time in almost four years and the outlook for the British capital’s housing market is fading, the Royal Institution of Chartered Surveyors (RICS) said yesterday.

RICS said its house price index for the capital dropped below zero in September for the first time since January 2011, ending a record period of growth. Its national index fell to 30 from 39, the lowest in more than a year.

The report, based on a monthly poll of surveyors, also showed that London may lag behind the United Kingdom market over the next year, with price growth of just 1 per cent. Respondents expect the average national price to rise 2.1 per cent in that period.

As Britain’s property market cools, London is being hit hardest by measures aimed at curbing reckless mortgage lending and the threat of a tax on the most expensive properties.

A surge in values in the capital over the past year has also stretched affordability and put potential buyers on edge.

“The growing sense of caution seems to have taken a particular toll on the London market,” RICS said.

The survey also showed that new buyer demand slipped nationally for a third month in September and was down for a fifth month in London.