London's crazy house price bubble is finally losing some air

Anyone who's tried to buy in London knows that property prices in the capital are insane.

New figures from online estate agent Rightmove released this morning show average asking prices in London are £581,074, compared to £285,891 nationally.

But prices in the capital have actually dipped so far this month, falling 2.3% compared to April. Nationally the average asking prices slipped by just 0.1% and London registered the biggest monthly fall.

Rightmove put the slump down to pre-election jitters. London would have been hit hardest by Labour's mansion tax (although some analysts think the Tories may yet introduce a version of it).

Unfortunately Rightmove don't expect house prices to continue to cool, with the surprise Conservative victory giving both buyers and sellers more confidence.

Rightmove's housing market analyst said: "This is an election-driven price stall which gives some buyers only short-term relief from the back-drop of a long-term housing shortage, and many estate agents are now reporting a resurgence in interest following the surprise election result."