London house price growth slowed dramatically in September ahead of stamp duty holiday end

The London property market slowed dramatically in September ahead of the end of the stamp duty holiday, official figures show today.

The average cost of a home in the capital dropped 2.9 per cent in the month to £507,253 following a sharp rise in August.

The annual rate of increase is just 2.8 per cent, the smallest rise for any region of the UK for the tenth consecutive month.

Chancellor Rishi Sunak withdrew the last of the stamp duty perk first introduced in July 2020 to boost the property market during the pandemic at the end of September.

Data from the Land Registry show that flats remain hardest to sell with prices up only 0.74 per cent over the year as buyers opt for larger homes with outdoor space.

The average cost of a detached house in London was up by almost 10 per cent, a semi-detached home by eight per cent, and terraced houses by almost 5.5 per cent.

Across the UK as a whole average prices were up 11.8 per cent over the year to September to a record high of £270,000.

Jamie Durham, economist at consultants PwC UK, said: “The continued strong rate of price growth across the country is driven by a number of factors, including a shift to buying larger and more expensive properties, the accumulation of consumer savings during lockdowns over the last 18 months, the imbalance of supply and demand, and continued low interest rates.

“London’s performance, however, stands out most. Prices increased by only 2.8 per cent, which is significantly below the rest of the country.

“This slower growth reflects in part the already high cost to purchase in the capital. The tapered stamp duty holiday, in place until the end of September, is also likely to have primarily benefited regions outside of the capital and may explain some difference in performance.”

Prices are rising fastest in Haringey, where they went up 14 per cent over the year, Redbridge (13 per cent) Hammersmith & Fulham (12.9 per cent) and Bromley (10.7 per cent.) The biggest falls were in Tower Hamlets where they dropped seven per cent, and Wandsworth (down 4.7 per cent.). Both boroughs have substantial numbers of expensive new build apartments which have proved hard to sell.