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London house prices fall for the first time since 2009 London house prices fall for the first time since 2009
(about 3 hours later)
House prices in London have fallen for the first time since 2009 and prices across Britain overall rose at their slowest pace in more than four years in September, mortgage lender Nationwide said on Friday. London house prices fell for the first time in eight years, Nationwide said on Friday.
In a latest sign of the slowdown in Britain’s housing market since last year’s Brexit vote, Nationwide said prices in London fell by an annual 0.6 per cent this month. Across the UK the average price of a home increased at its slowest slowest pace in more than four years in September, the building society said.
London - which has attracted property investors around the world - represented the weakest performing region in the country for the first time since 2005. London was the only region to see a year-on-year fall, with prices down 0.6 per cent - the first annual drop since the aftermath of the financial crisis in 2009.
Nationally, Nationwide said house prices rose 2.0 per cent year-on-year in September, slowing slightly from a rise of 2.1 percent in August and the weakest increase since June 2013. It was the first time since 2005 that London was the worst performing region in the country.
A Reuters poll of economists had pointed to annual growth of 1.9 per cent for house prices across Britain. The East Midlands topped the list with average values jumping 5.1 per cent in the year to September.
Nationwide said pressure on household incomes, caused by rising inflation and slow wage growth, was cancelling out some of the support for the market from rock-bottom interest rates. Across the UK as a whole, house prices rose 2.0 per cent year-on-year, marginally below the 2.1 per cent registered in August and the weakest increase since June 2013.
The Bank of England is widely expected to raise rates soon, possibly as soon as 2 November at the end of its next policy meeting. But Nationwide said a modest rise by the BoE would probably have only a small impact. Record-low interest rates had supported the market, Nationwide said. However, that effect is now being cancelled out as rising inflation and weak wage growth increases the pressure on household incomes.
“This is partly because the proportion of borrowers directly impacted will be smaller than in the past. In recent years the vast majority of new mortgages have been extended on fixed interest rates,” Nationwide chief economist Robert Gardner said. The Bank of England is widely expected to raise rates soon, possibly as soon as 2 November at the end of its next policy meeting.
UK house prices were rising by more than 5 per cent a year at the time of last year’s referendum decision by voters to leave the European Union, according to Nationwide’s index, almost three times the current pace of growth. On Friday, Bank of England governor Mark Carney gave his clearest signal yet that the Monetary Policy Committee could be about to increase the benchmark rate from its current level of 0.25 per cent.
"What we have said, that if the economy continues on the track that it's been on, and all indications are that it is, in the relatively near term we can expect that interest rates would increase somewhat," he said.
However, Nationwide said a small rise is likely to have minimal impact on the housing market.
 Nationwide chief economist Robert Gardner said: “This is partly because the proportion of borrowers directly impacted will be smaller than in the past. In recent years the vast majority of new mortgages have been extended on fixed interest rates,”
"Annual growth rates in the south of England have moderated towards those prevailing in the rest of the country.
"London has seen a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, albeit by a modest 0.6 per cent.
"Consequently, London was the weakest-performing region for the first time since 2005."
UK house price growth has collapsed since last year’s Brexit vote. 
"Consequently, London was the weakest-performing region for the first time since 2005."
In month-on-month terms, house prices rose by 0.2 per cent in September after falling by 0.1 per cent in August.In month-on-month terms, house prices rose by 0.2 per cent in September after falling by 0.1 per cent in August.
Reuters