Massive Drop in London House prices

LONDON — Estate agents are selling less than one property a week as a lack of mortgage finance hits the number of people moving house, fuelling plummeting prices, a surveyors’ body said on Tuesday.

The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of 11.5 homes during the three months to the end of September — the lowest level since its surveys began in 1978. Last month, the figure was 12.7.

Surveyors are hopeful the situation will pick up after Prime Minister Gordon Brown unveiled a bank nationalisation programme on Monday, saying that as part of it, he expected banks to restore customer lending to 2007 levels.

RICS spokesman Jeremy Leaf said the announcement “raises the possibility that the lack of mortgage finance that has so damaged the housing market might be eased” after the recent turmoil.

“The housing market continues to hold its breath and unless mortgage liquidity improves, the market is likely to remain a dormant beast for some time to come,” he added.

New mortgage lending fell 95 percent in August to 143 million pounds according to the Bank of England — the lowest level since records began.

Meanwhile, house prices slumped 12.4 percent in September compared with the same time last year, the sharpest fall in 25 years, home loans provider Halifax said this month.

The RCIS’s findings are based on a survey of 300 member firms.

 

One flat in Folkestone, Kent, went on the market on January 28 this year at £125,000, and has now been reduced to £75,000.

The one bedroom lower ground floor property lies in an upmarket area of the coastal town, and is in need of refurbishment.

When Sky News Online posed as cash buyers, the estate agent Fell Reynolds confirmed the flat had been slashed from £125,000 to £99,950 and then to £75,000 because of the housing slump.

“We felt that because of the lack of interest and the market conditions, £75,000 would be a realistic price,” the agent added. “It’s a nice little flat in a good area.”

Other properties in the UK have fallen even more sharply, according to Propertysnake, a website which measures price reductions.

One two bedroom house near Worthing, West Sussex, was first advertised last October at £319,950 – but is now down a staggering 53% to £149,995.

 

 

A similar home in Cardiff, Wales, has been slashed by 45% from £184,950 to £100,000 in less than a year.

The news comes as new figures out this morning show estate agents are selling only one house a week.

The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of just 11.5 homes during the three months to the end of September – the lowest level since its survey first began in 1978.

The situation is even worse in London, where estate agents have made an average of just eight sales during the period.

Some London homes on the market are down 20% from original asking prices, taking them back to levels seen in 2005 and 2006.

And completion prices are even lower because of ‘gazundering’ in the capital, where buyers cut their offer at the last minute.

A five-bedroom house in Herne Hill has been cut by 37% from £1,275,000 to £795,000 as the number of homes sold in London falls to its lowest level since records began 30 years ago.

One London agent said: “We’re 20% down. There are some very, very keen sellers out there.”

In other figures out today, the number of first-time buyers getting on to the property ladder slumped to a record low during August.

An RICS spokesman said he hoped this week’s bail-out of three high street banks would help the housing market and restore buyer confidence.