UNITED Kingdom house prices posted the biggest annual decline since at least 2002 as banks choked off mortgage lending, deepening London's property slump, Rightmove Plc said.
The average asking price for a home fell 4.8 percent in August from a year earlier to 229,816 pounds (US$426,929), Britain's most-used property Website said yesterday in a statement. On the month, home values dropped 2.3 percent, the most since December, led by London.
"The lack of mortgage finance is central to the problem," Miles Shipside, commercial director of Rightmove, said in the statement. "London, in particular, appears to be having its own special summer sale, with over 21,000 pounds off in a month."
Bank of England Governor Mervyn King said last week that the housing market faced "a significant adjustment" as banks rationed loans for home buyers. Falling prices may exacerbate the economic slowdown as the threat of a recession looms and unemployment rises the most in 16 years.
The pound traded at US$1.8663 against the dollar in London, from US$1.8623 yesterday, the currency's first gain in 12 days. Against the euro, it was little changed at 78.89 pence.
Prices in London fell 5.3 percent on the month and 3.8 percent from a year earlier. Each of the 32 districts in the capital showed a decline, and the biggest drop was in the southwest area of Wands°?worth, where values fell 7.9 percent.
Hackney, in east London, was the best performer, with a 0.6-percent decline.