LONDON, Oct 15 — London house prices fell for a fifth month in August, the worst streak for the UK capital since the depths of the recession seven years ago.

The 0.6 per cent drop, taking the average value to £580,930 (RM2.97 million), followed a 1 per cent fall the previous month, LSL Property Services and Acadata said today. The annual pace of growth has now slowed to just 2.2 per cent, the weakest since early 2012.

The decline is being led by higher-priced boroughs in central London, according to LSL. That analysis is echoed in forecasts by Savills Plc, which said last month that luxury homes in the city will slump 9 per cent this year, the most since 2008, after Britain voted to leave the European Union.

Property website operator Rightmove has also highlighted a divergence in London’s market, with the most expensive district — Kensington and Chelsea — seeing asking prices down almost 12 per cent in the past year. That’s partly due to the recent introduction of tax surcharge on buyers of such properties.

"We’re seeing a two-speed market become firmly established as cheaper parts of the capital and the regions record big price increases driven by demand for affordable homes, while prime London property stalls,” said Adrian Gill, director of Your Move and Reeds Rains estate agents.

LSL publishes detailed regional numbers with a one-month lag. For September, data for England and Wales showed prices were unchanged on the month and up 3.5 per cent year-on-year. Excluding London and the southeast, national prices were up an annual 3.8 per cent. — Bloomberg