House prices in London are falling.
That's unusual — prices in the capital have been characterised by decades of turbo-growth.
Here are the factors driving the slowdown.

LONDON — Something very unusual is happening to house prices in London: they're falling.
New figures from Acadata on Monday reported dramatic price falls in the capital. The data firm said London prices dropped 4.3% in the year to January, the biggest fall since August 2009. That echoes every other major index, with RICS and Nationwide also reporting price falls in recent months.
For two decades, the market has been characterised by turbo-growth. The average house price rocketed nearly 500% from £98,000 in January 1998 to £485,000 in January 2018, compared to the £227,000 UK average:

So what's driving the current slowdown? The answer is a heady mix of sluggish economic data, Brexit uncertainty, and bloated prices. Here's the breakdown.
1. Mortgage problems
"There are two things that are going to fundamentally shape the UK market over the course of the next ten years: Mortgage regulation and interest rates," Lucian Cook told Business Insider last year.
In 2014, the Bank of England introduced rules which ensured banks could only make 15% of mortgages on their books more than 4.5 times the borrower's salary. That makes life particularly hard for buyers in London, where the affordability gap between salaries and house prices is biggest. The ONS says that seven of the 10 least affordable local authorities are in located in the capital.
"Mortgage regulation is designed that people don't overstretch themselves. But what it does is cap the amount people can borrow relative to their income, and that keeps deposits high for first-time buyers and for home-movers generally," Cook said.
2. Brexit uncertainty
Mortgage issues combined with Brexit-related uncertainty are a bad mix for house prices in the capital. Negative sentiment around Britain's EU exit appears to be holding buyers back from moving house and that, in turn, is hitting demand and driving down transaction volumes, meaning the number of houses being bought and sold.
"London’s housing market has been pushing up against the limits of mortgage regulation and affordability for some time," Savills research analyst Lawrence Bowles said last year. "The Brexit vote was the tipping point that slowed price growth."
“Greater economic and political certainty should trigger a return to growth in 2020, though this will be capped by borrowing constraints as gradual increases in the cost of mortgage debt impinge on affordability.”
3. Bloated prices at the top of the market
Prices falls are concentrated in the most expensive areas of London, where a £1 million property counts as a bargain and affordability is the most stretched. The top 11 of London's 33 boroughs are down an average 7% annually, according to Acadata.
Kensington & Chelsea remains the most expensive borough, with an average price of £1,805,000, but prices have fallen sharply there by 12.9% in the last year — more than £200,000. Prices in Camden fell 10.8%, the City of London by 18.2%, and in Wandsworth by 12.7%.
Price falls are much less acute at the lower end of the housing market. The 11 cheapest boroughs have seen a modest fall of 1.3% over the year overall, according to Acadata.
A bounceback in 2020
Estate agents Savills forecasts that prices in Greater London will fall 1.5% over 2017 then fall by a further 2% in 2018, before stabilising in 2019 and returning to growth the year after.
Here are Savills' five-year regional forecasts in full:
SEE ALSO: UK house price growth is set to slow by half over the next 5 years - here's why
SEE ALSO: South-west London is now seeing the biggest falls in property prices in the capital
SEE ALSO: It now takes 78 days to sell a London property a week longer than in 2017
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