London House Prices Not Falling

London’s housing market continues to defy the skeptics. While prices are slumping around the U.K., London valuations remain on pace for a 17 percent increase in 2007, according to the latest Financial Times house price index.

The average price for a home in the capital is £363,364 (€521,573/$738,583), compared with the national average of £225,826 (€324,171/$459,019), according to FT.

“London remains completely out of step with the rest of England and Wales,” said Peter Williams, chairman of Acadametrics, the company that produces the FT index.

But not all the news is sunny. Capital Economics, a financial firm, has raised the possibility of price declines in 2008 and 2009. A London Times article–entitled, “Heaven Knows Estate Agents are Miserable Now; But Do They Have Any Right to Complain?”–notes Capital has been “badly wrong in the past and its views go against those of the majority of commentators.”

However, anyone expecting double-digit price growth to continue has “only themselves to blame if they are miserable now,” concludes the article, which provides a detailed look at the market.

Meanwhile the Royal Institution of Chartered Surveyors is out with its report on September, which shows a negative price growth in the U.K. for the second straight month. According to its report, the price decline is the steepest since Sept. 2005, with confidence in a rebound deteriorating among the group’s members. However, London was the one area showing strength, the group found.