What's happening to London house prices?

Since 2006, property prices in Greater London have gone up by an average of20.1% - far more than the 10.8% rise in England and Wales as a whole. In prime central London, they went up by 34% in the same period, according to Savills. Yet what a difference a year makes. Suggestions that the capital might prove immune to the general housing market slowdown that began elsewhere in Britain last summer are proving false.

From Crouch End to Clapham, Highgate to Hackney and Tooting to Totteridge,house prices are stagnating, with some boroughs even seeing consecutive monthly falls. What, then, is going on in London?

“We’re at the end of a boom,” says Miles Shipside, commercial director of Rightmove, the property website that monitors asking prices. “The overlaying of the credit crunch onto a market that was overheating after two years of rapidly rising price Related Attachments -->

“We have entered a period of readjustment. Generally, where London leads, the rest of the country follows, but this time it is the other way round. The rest of the country led the slowdown and now London is catching up. The darling locations of the City bonus boom will never be ugly ducklings, but some of the shine has come off the top of the market.”