UK Property Prices Suffer 'Largest Decrease Ever' As London Real Estate Goes Into Full-Scale Collapse

A survey of 90% of the market by Rightmove, a real estate price tracking company, shows that real estate prices fell 2.9% in August, the second consecutive down month this summer.

Prices fell nearly 6% in the overheated London market.

That news dovetails ominously with the rumors of "panic selling" in London as owners try to cash in on their overpriced houses at the very top of the market.

While prices generally cool off in summer when fewer people feel like moving, according to Rightmove, the decline was the worst the agency has ever seen:

... this is the largest decrease ever recorded by Rightmove at this time of year, and a lead indicator of a slower market in the second half of 2014. The price fall has been exacerbated by London recording a 5.9% drop, which is the largest of three consecutive monthly falls.

Here are the data in charts.

This average price tracking line shows a clear decline over recent months:

Here's the same data expressed in terms of percentage growth. Note that this August's seasonal dip is worse than 2013:

People are selling far fewer properties now than they were last year - perhaps because sellers can't get the prices they want.

If you want evidence that London is in a full-scale collapse, here's Rightmove's current chart of the best-performing neighborhoods in the city. They're all down:

Rightmove's staff and estate agent network had several explanations for the news: They attributed the declines to the season, the Bank of England's talk about raising interest rates soon, and buyers being priced out of the market.