House prices in London fall as many look to move away from the city

Figures from Nationwide show that the north-south divide on house prices has flipped on its head, and London is the UK’s worst-performing region.

With many now realising they can spend a large majority of their week working from home, there has been a surge in numbers of people who have or are looking to move out of London and other urban areas. According to Nationwide, UK house prices as a whole dipped by 0.2% in March after taking account of seasonal factors, following a 0.7% rise in February.

The chancellor’s extension of the stamp duty holiday explains the slowdown; the original end date was set for 31 March. However, Sunak announced in the budget that it would be extended until 30 June.

The extension resulted in the annual house price growth slowing to 5.7% in March from 6.9% in February, with the average UK house price now sitting at £232,134.

In the first three months of 2021, Nationwide figures show London was the UK’s weakest performer, with annual price growth falling to 4.8%, down from 6.2% in the final quarter of 2020.                                

Robert Gardner, Nationwide’s chief economist, said recent signs of economic resilience and the stimulus measures announced in the budget, including the extension of the furlough scheme and the stamp duty holiday, as well as the introduction of a mortgage guarantee scheme, suggested market activity “is likely to remain buoyant over the next six months”.