Monthly figures reveal huge fall in property prices

FRESH evidence of London's collapsing property market emerged today as new figures revealed prices in the capital fell almost nine per cent in the last month.

Homes in Kensington & Chelsea lost an average of £13,000 last month alone, while those in neighbouring Hammersmith & Fulham fell by £7,700, Richmond by £7,500 and in Wandsworth and Merton by £6,000, the Hometrack figures reveal.

The latest monthly fall of 1.6 per cent comes as the Centre for Economics and Business Research said price falls across the country will knock £50,000 off the value of the average home by the end of 2009, pushing values back to their 2004 level. It said prices look set to fall by a quarter from their peak, with the average home set to tumble from a high of just below £200,000 to a low of about £150,000 by the end of next year.

To add to the gloom, data from the National House Building Council reveals that house building in London has hit an all-time low, with only 517 private homes started last month.

The figure is almost half the number begun the year before.

September's fall means London is now the region with the sharpest house prices drop in the country. Hometrack's director of research, Richard Donnell, said: "Weak consumer confidence continues to undermine demand for housing with a 35 per cent fall in the number of buyers registering with agents over the last six months.

"The supply of homes for sale has started to shrink in recent months as well, as some homeowners take their properties off the market. The scale of the decline in demand means prices remain under constant downward pressure."

The number of new private homes being built was also sharply down on August, when construction began on 635.

The NHBC, which registers all new builds, recorded massive falls compared with last year in London and the South East - as well as England as a whole.

Its findings will blow a further hole in the Government's plan to get three million new homes built by 2020.

The falls were almost entirely in the private sector. Housing associations are still benefiting from government money and from planning deals done before the slump and their figures are slightly higher than in the comparable periods last year.

NHBC chief executive Imtiaz Farookhi said: "Our latest figures show that the downturn is continuing to have a severe impact on the output of new homes in the private sector.

"The average fall in England during the third quarter was 50 per cent year-on-year."

The number of new homes completed also fell by around a third between July and September.