Slowdown for top London prices

Savills, the estate agent specialising in the upper end of the housing market, is expecting a slowdown in property price inflation for London’s most expensive dwellings.

In the past year London property prices at the top end of the market have seen increases of 15% and Savills expects this to drop back to around 10%, as a direct result of the recent turmoil in the money markets.

However, the estate agent is still experiencing strong demand from overseas buyers and wealthy UK residents, and a shortage of prestigious properties in the capital remains.

Savills is currently acting for Candy Brothers on its One Hyde Park development where the penthouse apartments are selling for £84 million.

The development is selling well and the estate agent expects strong demand for other expensive London residential projects, such as the £1 billion redevelopment of Middlesex Hospital.

London homes selling for between £800,000 and £900,000 remain in short supply, with Savills predicting this year’s price growth of 7% will fall back to around 5%, in 2008.

However, on commercial side, where Savills has around 80% of its business, the increased cost of credit means that many businesses are experiencing difficulties in securing the debt financing needed to buy new premises.

Prime office locations are in short supply but less prestigious commercial developments offered for sale are experiencing the affects of a lack of confidence in the debt markets.

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