London home prices continue to be resilient against any change taking place within the housing market, unlike other areas of the UK.  Homes outside of the Capital City have been steadily falling in value and there are no indications that the trend will reverse course.  The simple economic model of supply and demand seems to have no influence over home prices in many places in the UK.  One thing remains – it is still a question as to why home prices are still high even though sales are down.

Jonathan Davis, financial adviser, believes the same trend of falling home prices will eventually affect the city of London.  So far, epicenter of the UK contains property which is fetching top dollar.  It is not unusual for a London flat to sell for a million pounds, and then some.

Davis commented on the current condition of pricing of the market overall, saying: "The big picture remains the same - for most of the country we have not just a state of collapse in transactions, but prices.

"The volume of transactions is very low and is not going to get any better, especially when asking prices are 35-40% above actual selling prices."

He also mentioned how London and South East mortgage lending numbers had begun to struggle, and prices will likely follow.

Ed Stansfield, of Capital Economics, discussed the possibility of falling property prices, saying: "One-third of all jobs created since the end of 2009 have been in London and three-quarters of all jobs created have been in London, the South East, South West and in East Anglia.

"So the north-south divide is real in the labour market."