House prices fell in nearly 80 per cent of postcodes across England and Wales over this year, but the strength of the London market boosted by demand from overseas buyers prevented the overall decline from being even worse, property analyst Hometrack has said.
Average prices declined by 2.1 per cent overall, but in some of the most desirable areas of London they went up by as much as five per cent over 2011, recording an average increase of one per cent across the capital.
Some 78 per cent of postcodes across England and Wales registered house price falls over 2011, but prices have gone up across 43 per cent of London areas during the same period, with the main hotspots concentrated in central and west London.
The study did not list the areas which have experienced the worst declines over the year.
Despite the more positive outlook for London, Hometrack expects prices to fall by another three per cent across England and Wales by December 2012, and rents to rise by two per cent as buyers who cannot get onto the property ladder remain trapped in the booming rental sector.
Richard Donnell, director of research at Hometrack, said: “The strength of the London market, where prices are up one per cent and by more than five per cent in central London, has flattered the national picture.”
Prices in around three quarters of postcodes in south-west and north-west London rose. More than 95 per cent of prime central London also saw increases over the year and this area also experienced rises of five per cent.
Prime central London includes well-heeled areas popular with tourists such as Knightsbridge, Mayfair, Kensington and Chelsea and the City.
Price drops tended to be concentrated in east and south east London, partly due to weaker domestic demand, Hometrack said.