London house prices plunge on financial turmoil

London home sellers lowered asking prices by the most in a year in August as demand in Britain’s most expensive property market was hit by turmoil in financial markets, Rightmove said.Asking prices in the capital dropped 3.4 per cent from the previous month, when they decreased 1.4 per cent, the UK’s biggest property website said in an e-mailed report today. Nationally, values fell 2.1 per cent, a second consecutive monthly decline and the largest since December.“Prices often fall back at this time of year, but the renewed turmoil in global financial markets may be starting to hit home with London buyers who have thus far been insulated from the worst of the downturn,” Rightmove said. While values are being supported by a lack of property supply and record low interest rates, waning consumer confidence and the potential impact on bank lending from an escalation of Europe’s debt crisis may undermine activity further, Rightmove said. UK business confidence fell last month and the recovery in the labor market will slow, separate reports published today showed.National asking prices were down 0.3 per cent in August from a year earlier to an average 231,543 pounds ($377,000), Rightmove said. That’s the first annual decline since September 2009. In London, prices were up 3.2 per cent to 418,008 pounds. UK stocks have plunged this month, with the FTSE 100 Index falling 9 per cent amid a global selloff sparked by concern that Europe won’t be able to contain its debt crisis. Europe’s Stoxx 600 has fallen 11 per cent.Rightmove said the impact of the financial turmoil across the UK is “likely to be limited because prices are already bumping along the bottom.” From / Gulf Today