Residential tower blocks stand on the skyline of east London. (Photographer: Simon Dawson/Bloomberg)

London Housing Woe Endures as Prices Drop to 2 1/2-Year Low

(Bloomberg) -- The new year brought little cheer for London’s housing market with asking prices dropping to the lowest since August 2015.

New sellers cut prices 1.4 percent in January to an average of 600,926 pounds ($821,500), according to a report by Rightmove Plc on Monday. In a further concerning sign for the market, the average number of days required to sell a house jumped to the longest since January 2012, reaching 78 from 71 a month earlier.

London Housing Woe Endures as Prices Drop to 2 1/2-Year Low

The report suggests 2018 won’t be any brighter for the capital’s housing market, which was the worst performing in the U.K. in 2017. Asking prices are down 3.5 percent from a year ago, according to the report, with the slowdown due to factors including an inflation squeeze, Brexit uncertainty and tax changes affecting landlords and owners of second homes.

The figures are evidence of “a bout of realism rather than the usual New Year optimism,” according to Rightmove director Miles Shipside.

Nationally, the picture is slightly better with U.K. asking prices rising 0.7 percent this month, and indicators of activity showing “that demand remains robust,” the report said.

A separate report from LSL Acadata showed average prices in England and Wales rose by just 90 pounds in December, while the annual growth rate fell for the seventh month to just 0.2 percent -- the smallest increase since March 2012. London prices were 4.1 percent lower in November from a year ago, Acadata said.

©2018 Bloomberg L.P.