Home prices in London have been falling at a fast pace as demand for properties have been declining. Now, a latest report by the Royal Institute of Chartered Surveyors (RICS) revealed that prices fell in September for the first time since 2011 in the British capital.
RICS surveys several real estate agents and market experts to gauge prices in the country. The latest poll results saw 30 percent of the polled experts saying home prices increased in the United Kingdom - down from the 39 percent recorded a month ago.
"A growing sense of caution seems to have taken a particular toll on the London market where buyer demand contracted more significantly than elsewhere in September, falling for the fifth consecutive month," the report stated, according to The Telegraph.
Prices have been declining in London as demand for properties have been decreasing. This is the third straight month of declining demand in London, RICS stated in its report. Surveyors expect home prices to go up by only 2.1 percent in the United Kingdom in the next year. They predict home prices in London to inch up one percent in that period.
"This is a healthy development. However, ideally, more supply should be coming onto the market, but with interest rates still at historically low levels and long-term house price expectations positive, households are not under any real economic pressure to sell," Simon Rubinsohn, chief economist at RICS, was quoted by The Daily Mail.
"Next year, we expect the house price outlook to be far more subdued," he added.
The RICS report comes after similar reports by Hometrack Ltd., Halifax and Nationwide, all of which showed signs of slowing growth or price drops.
Average home prices in London crossed $815,175 in August and soared by 18.4 percent in the past one year alone. London was recently named the world's most expensive city in Savills' 12 cities report, beating last year's champion Hong Kong.
The report claimed that London's real estate costs accelerated 10.6 percent in the first six months of 2014 with the annual cost per employee crossing $120,000.
The high prices could have a battering effect on the city's economy as more people move away from the area in search of cheaper residences and cost of living. But on the other hand, London is becoming a favorite with the businessmen of the world.
A recent survey by Japan's Global Power City Index found that London was the most favored city for business and development. The city also had the highest scores in cultural interaction category beating New York City and Paris, according to Bloomberg.
