Asking prices for properties in London have fallen for the first time in a year, according to property website Rightmove. The report could signal that affordability pressures across the country are about to ease.

Rightmove said that London asking prices, which had risen by around 2% per month for the past year, fell by 0.1% in the past month. The data suggested that sellers are adopting more realistic pricing expectations as purchasers struggle to cope with the impact of five rises in interest rates over the past year and mounting global economic uncertainty.

Across England and Wales, prices were up by a modest 0.6% in August, compared with 0.3% in July. That took the annual rate up to 12.8% from 10.3% last month. Despite the rise, Rightmove said that the trend was consistent with house prices increasing more in line with wage inflation for the foreseeable future.

Miles Shipside, commercial director of Rightmove, said that the weaker figures for London were an early indicator of the market’s direction. “This fall is the first we have seen for some time and is an early warning signal that even the buoyant London economy is susceptible to market forces. The capital and international status of London means that prices are likely to be more resilient in the longer term, unless the current turmoil in the financial market undermines employment and wealth creation.”

Figures from Nationwide last month suggested that the UK market is finally slowing down, after a “mini-boom” which lasted a year and a half and which saw the revival of double-digit property inflation.
If the weakness reported by Rightmove spreads nationwide, it would lower pressure on the Bank of England to move swiftly with another interest-rate rise. The Bank had suggested in this month’s Inflation Report that a sixth rise might be needed to stem inflationary pressures, but expectations of an imminent move have dropped after soft inflation numbers and amid chaos in the financial markets.