London's property market slows down after red-hot year

London house-price growth is slowing after the best year since 2006, with values sliding in the most expensive districts of Westminster and Kensington and Chelsea.

Average asking prices in the capital this month have increased 0.2 per cent to £514,704 (HK$6.55 million), after growing 10.6 per cent last year, the operator of property website Rightmove said. Values in Westminster slid 8.3 per cent, while Kensington dropped 6.9 per cent.

"The average asking price of property coming to market is having a pause after a pretty hectic year of heady rises," said Miles Shipside, a director at Rightmove in London. "It's traditionally a quieter time of year. London needs more properties for sale to lessen upward price pressure."

London is leading the market as supply fails to keep up with demand and the capital's economy powers British expansion.

Bank of England governor Mark Carney predicted last week that housing would continue to strengthen this year, and while policymakers have downplayed concern that prices could spiral, they scaled back a mortgage lending programme last year.

Capital Economics predicts London's economy will expand 4 per cent this year and next. It has projected a 3 per cent annual increase in UK gross domestic product in the same period.