The average price of a London apartment plummeted by £40,000 ($53,000) over the past year, according to a new survey.

London

London apartment values are falling as first-time buyers struggle to get mortgages and existing homeowners prioritize bigger houses with more outdoor space.

The average price of an apartment in the U.K. capital plummeted by 40,000 pounds ($53,000) over the year through September. Central districts, such as the City of Westminster and City of London, are seeing declines in values because they have a higher percentage of those homes, according to a report on Tuesday by chartered surveyors E.Surv.

Homeowners have taken advantage of the temporary suspension in the stamp duty sales tax to move home, creating a two-tier market. Rising sales of luxury properties boosted the average home price in London by 7.3% to 646,614 pounds in September from a year earlier. That number has also been skewed by fewer transactions at the bottom end of the market after lenders demanded higher down payments from those purchasing their first home.

The current surge in values “won’t last because what’s going to start to kick in, regardless of the stamp duty holiday, are forced sales as furloughing ends and redundancies grow,” said Yolande Barnes, a researcher at University College London. “Given that it really does not look rosy you would expect the demand for housing has to fall.”

The U.K. housing market has boomed in the second half of the year, with a government tax cut on home sales and pent-up demand benefiting homebuilders. The growth in London prices in the 12 months through September was the most since the first quarter of 2016. Homebuilders including Taylor Wimpey Plc have reported interest in buyers looking to upgrade their living arrangements and Crest Nicholson has seen strong demand for their sites in the suburbs.

However, across Britain “there is already clear evidence of the slowing market, despite the pressures imposed by the deadlines for completion before March 2021. Strip those out and the market might begin to look a lot less buoyant,” according to the E.Surv report.

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