London house prices in first annual fall since 2009

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The average price of a home in London dropped in 2017 for the first time in eight years on fallout from Brexit, data showed on Thursday.

While prices were up nationwide, they were down in London for the first time since 2009, mortgage lender Nationwide calculated.

UK house prices rose by 2.6 percent overall last year -- slower than the 4.5 percent seen the previous year -- said Nationwide, whose monthly survey is closely watched by markets.

However, “London saw a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, albeit by a modest 0.5 percent” during the fourth quarter, said Nationwide chief economist Robert Gardner.

In addition, London was the UK’s worst-performing region for the first time since 2004.

“How the housing market performs in 2018 will be determined in large part by developments in the wider economy,” noted Gardner.

“Brexit developments will remain important, though these remain hard to foresee,” he added.

Inflation up

Since Britain voted to leave the European Union in June 2016, a drop in sterling -- making imported goods more expensive -- has pushed inflation up to more than 3.0 percent.

In 2017, “low mortgage rates and healthy employment growth continued to support demand” for housing, according to Gardner.

“However, this was offset by mounting pressure on household incomes, which exerted an increasing drag on consumer confidence as the year progressed.”

While UK unemployment is at the lowest level since 1975, wages are not keeping pace with inflation.

Britain remains on course to exit the EU in March 2019.