homewoners cut prices in london
Homeowners have been forced to cut the asking price on their properties by 1.2 per cent during the past month as the reality of the housing market downturn hits home, according to figures published by the property website Rightmove.
Householders in England and Wales had to reduce the cost of their home by nearly £3,000 during the five weeks to 14 June, with the average price tag on a property now at £239,564.
The fall – the first recorded during the peak month of June by Rightmove – followed a 1.2 per cent house price rise the previous month, and suggested that homeowners in the south of England were being worst hit by the stagnating market.
According to the website’s commercial director, Miles Shipside, future sellers can expect to knock 10 per cent off what their house was worth at the height of the property boom. He added: “In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking for record prices. It was a mad state of affairs that defied the laws of economics. Thankfully, new sellers are now taking some proactive steps to price more realistically.”
The ration of properties on the market to buyers has doubled to 15-to-one in a year, forcing homeowners to slash prices.
Only one in every 15 properties on the market were sold last month, according to figures published today (Mon). The oversupply has forced owners to slash nearly £3,000 off the average house price in the last five weeks.
The average home is now valued at £239,564, a fall of 1.2 per cent. The drop is the first ever recorded fall in house prices in June, which is traditional seen as peak season for house selling.
On average there are now a record 75 unsold properties on the books of every estate agent in the country.
The report warns “run-of-the-mill” properties are being particularly badly hit and semi-detached homes in commuter towns need to be marketed as rock bottom “bargain buys” to stand any hope of selling.
London’s Luxury Property Prices
Luxury-home prices in central London, the world’s most expensive location for prime real estate, fell the most since the first quarter of 1992 as sales slumped, Knight Frank LLP said.
The average price of houses and apartments costing more than 2 million pounds ($3.9 million) fell 1.5 percent in May from a month earlier, Knight Frank said today in a statement. That cut the annual increase to 13 percent, down from a peak of 38 percent in August.
“With the mortgage market in growing difficulties, the weakness seen across the wider U.K. market is now spreading to the prime London market,” Liam Bailey, Knight Frank’s head of residential research, said in the statement.
The prime-property market for central London has weakened “notably” in the past two months, Knight Frank said, and prices will probably fall at least 5 percent this year. Tighter lending restrictions and the prospect of the worst job cuts in London’s main financial district since 2001 deterred some potential buyers of luxury homes.
“Purchasers are struggling to access finance at the current time and, combined with weaker sentiment, this has led to a slump in sales,” Bailey said. Sales in April and May were almost 50 percent lower than the same period a year ago, he said.
Super-Prime Growth
Sales of properties costing more than 10 million pounds, known as “super-prime,” are 40 percent higher than a year ago, Knight Frank said.
“The super-prime market is the only true hot spot,” said Bailey. “This market is not immune from a downturn, but its support from international buyers, who are in part funded by oil and other commodity wealth, means the prospects for super prime are still strong.”
The super-prime market is still growing, Jim Ward, head of residential research at Savills Plc, said at a presentation in London today. “Many of the buyers are financed by margins from commodities. There’s some further growth potential within that market.”
The most expensive address in Britain is Courtenay Avenue in the Highgate neighborhood of north London, where prices average 6.8 million pounds, according to the Mouseprice Web site.
London properties priced from £5 million will not experience the house price falls being noted across the country, according Knight Frank.
According to US investment bank Citigroup, house prices could fall by as much as 15 per cent by the end of the year as sellers struggle to find buyers amid worsening economic conditions.
However, according to Liam Bailey, head of residential research at Knight Frank, London properties in the price range of £5 million and £10 million will still be in demand since they typically attract international buyers from countries whose economies have remained unaffected by the downturn.
He said: “When you go above £5 million, it becomes very much an international market – the people who are buying are overseas buyers.
“They are generally coming from countries like Russia, Ukraine, Kazakhstan, the Middle East and the Far East, and they are bringing with them wealth from economic sectors that are untouched by the credit crunch, such as oil, gas, commodities and so forth.”
He added: “They are still buying and they are buying more now than they were last year. It is very healthy at the moment. I would have said it couldn’t go on outperforming until the last five months proved that it can
