London house prices fall in September: first time in eight years

High-end London property fell by 3.2%in year

House sales down by over a very large one-third

Global Real Estate Bubble Index see table

Brexit, rising inflation and political uncertainty causing many buyers to back away from market

U.K. housing stock worth record 6.8 trillion, almost 1.5 times value of LSE andmore thanthe value of all the gold in world

Homeowners and property investors shoulddiversify and invest in gold

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Editor Mark O’Byrne

In what might be a sign of things to come, London house prices have fallen for the first time in eight years.

London house sales have fallen by a third as years of frenzied biddingcome to a shuddering halt.

The capital remains expensive. Housing still costs 10 times the average salary and only 50% of Londoners own their own homes, the EU average is 70%.

Currently the rest of the UK appears to be benefiting from the lack of affordability and stock in London. Buyers are moving further out of the capital in order to secure their footing on the housing ‘ladder’ no snakes here

Last month U.K. house prices regained their fastest pace since February. AHalifax house price survey showed a 4% price rise in the three months to September compared with the same period last year.

Long-term, a fall in London prices may be an indicator that concerns over Brexit, inflation and political stability are beginning to affect the U.K property market.

This will be a hard landing for a country that is so convinced that putting all one’s eggs in the housing basket is the answer to securing and growing wealth.

‘Global Real Estate Bubble’

Last month,UBS Wealth Managementpublished itsGlobal Real Estate Bubble Index. London came sixth with a score of 1.77. The group concluded that London is still firmly in bubble-territory.

Global Real Estate Bubble Index

The research found that London house prices have climbed 15% in the last year and 45% since the financial crisis, when adjusted for inflation.

This suggests September’s fall in prices might be a signal that the top of the market is just behind us. This is no surprise when one considers both the known and unknown events on the horizon for the city.

Brexit is the most discussed threat. Foreign buyers are wary of what the future holds and there is anecdotal evidence that EU workers are being offered shorter contracts.Four years ago foreign buyers accounted for 82% of property purchases.

Brexit is the main stymie of political progress in the country.

Conferences, policy announcement and parliamentary discussions are dominated by how this may or may not play out. No-one knows what will happen, prompting many to feel uncomfortable with making major financial decisions.

This could go on for some time.

Meanwhile the Bank of England are tasked with sorting out the economy. They continue to encourage inflation and plan to raise interest rates. Thus devaluing the value of the pounds in our accounts and increasing the cost of borrowing.

It is not surprising, therefore, that it is not just in London that we are looking at the bursting of the property bubble.

Rest of the UK still climbingaccording to some

London, often an indicator for things to come for the rest of the U.K., should be a beacon for the rest of the country’s housing market.

Halifax data shows in September house prices hadtheir fastest annual rise since February. The year-on-year increase jumped a surprisingly large 4%.

Pundits believe this is an indicator that buyers are shrugging off threats of a rate hike by the Bank of England.

Others aren’t so sure. Nationwide’s own home price survey showed more subdued numbers (2%), suggesting there is a slowdown in house prices across the country, particularly in certain regions.

The pace of national price increases has slowed and is downfrom a peak of 10% in early 2016, to 4% today.

UK home price inflation

Halifax said future demand might be limited by ‘a squeeze on spending power from higher consumer price inflation and the high cost of property.’ However it does not think that future interest rate price rises would affect the market.

Despite concerns over inflation str