Prime London house prices fall
Properties in London’s “prime” housing market have experienced their first drop in value since 2003, when confidence was shaken by the outbreak of the war in Iraq.
Homes valued at over £1 million had previously appeared to be unaffected by the general slowdown in the market but according to estate agents Savills, prices fell by an average of 2% in the three months to the end of December.
The super-prime market (properties worth £5 million and above) remains resilient with 2007 growth down to 29%, as compared with 50.16% a year ago.
According to Lucian Cook, a director of research at Savills, the fall in prices occurred progressively over the quarter “as the full implications of the credit crunch have become apparent”.
This led to lower City bonus expectations and concerns for job security in the financial sector, although prices are holding up better than expected as the agent had forecast a fall of 3% in the final quarter of the year.
There is, however, evidence of a lack of confidence among buy-to-let investors and Mr Cook points out that: “Like a second home, an investment property is the ultimate discretionary spend.”
Prime property prices in areas such as Fulham, Barnes, Putney, Wandsworth and Richmond, saw a 0.6% rise in the last quarter of 2007 and Savills is forecasting a 5% increase in prime Central London property prices in 2008.