London house prices fall at fastest rate since 2009

London house prices have fallen by the most in almost a decade, official figures showed, at odds with the slow-and-steady growth in overall UK house prices.

UK house prices in July were up 3.0% on last year, but London residential property prices dropped 0.7%, the Office for National Statistics revealed, the biggest annual drop since September 2009. The fall was worse than the 0.3% seen in the previous month.

London house prices have been disproportionately affected by Brexit uncertainty, regulatory and tax changes hitting the buy-to-let market and a fall in European Union (EU) net migration since the EU referendum, according to the Bank of England's latest Inflation report.

Elsewhere, the average UK house cost £248,611 during July, up 1.2% from the month before, as the market saw strong growth in the North West, South West and West Midlands. The North West was the fastest growing region with an annual growth rate of 5.6%, up from 3.2% in the previous month.

North London estate agent Jeremy Leaf said the figures reflect the market as it was in the summer months and reported "a little more enthusiasm to sell homes than we have seen for a while" since buyers and sellers have returned from their holidays.

"This is the time of year when we would expect to have more activity and on the ground we are certainly seeing more property coming onto the market and more demand. But it is still hard to gain commitment from buyers because property needs to differentiate itself from the competition in order to attract interest and offers."