Posts with tag: drop in london house prices

Wealthy London Homeowners Drop Asking Prices

Homeowners in the luxury central London market cut asking prices, as they feared a Labour government.

Almost 40% of all property types in the prime central London sector sold below their marketed value in the first quarter (Q1) of this year, as vendors unwillingly lowered their asking prices.

Gazundering has not been seen so strongly in this market since 2012, when the country was emerging from the recession. Boroughs such as Belgravia, Kensington and Chelsea, Mayfair, and Knightsbridge experienced determined buyers looking for further price cuts at the point of sale.

Wealthy London Homeowners Drop Asking Prices

Wealthy London Homeowners Drop Asking Prices

New research from Lonres on the first three months of 2015 revealed that 64% of properties that had already been reduced in asking price, dropped the value again when the vendor was close to completion.

As the outcome of the general election has been more certain than anticipated, it is believed that this market will begin to pick up again.

The study also found that 72% of estate agents in central London witnessed a rise in price cuts in Q1 2015, and the average saving for buyers on homes worth over £1m was £240,000.

Managing Director of Douglas & Gordon estate agents, Ed Mead, says: “High-end central London has been dramatically affected [by uncertainty surrounding the election]. Volumes are down over 50%.”1

Savills estate agents also discovered that price reductions and a decline in demand caused a 5.2% drop in values over the six months to the end of Q1.

Managing Director of Rokstone, Becky Fatemi, says that price cuts indicated concerns over a Labour government, but that sellers accepted that values were too high.

She comments: “The froth has come off the market.”1 

The homes experiencing price reductions sold for 88% of their original asking price, the Lonres report claimed, and properties were on the market for an average of 32 days.

Director of Lonres, Anthony Payne, explains: “The high-end property market is an emotional place. The sale price is not based on any logic but merely my house is nicer than the one down the street.

“However, we found that if you discounted your home you would sell quicker than someone who did not but would inevitably need to bring the value down to the sale level further down the line.

“Interestingly, it’s the captains of industry, who make very clear decisions in their business world, who become emotional when selling their home and take it personally.”1


London House Prices to Drop by 5%

Published On: January 15, 2015 at 4:45 pm


Categories: Finance News

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There is a lack of new housing stock as sellers await the general election, according to the Royal Institute of Chartered Surveyors (RICS).

Estate agents are also predicting that property prices in London could fall by as much as 5% this year, and larger family houses will drop the most.

The RICS report indicates that demand for new homes in London is continuing to decrease, as 45% more RICS members claim to have seen a drop in new buyer enquiries in December, compared to November.1

The industry remained positive following the Stamp Duty reform announced in the Autumn Statement, which should lift the weight of tax for buyers.

London House Prices to Drop by 5%

London House Prices to Drop by 5%

However, survey respondents expect a decline in sales in the capital of 5%-10%, and a drop in prices from 2%-5%, as overinflated prices balance themselves, and there remains political uncertainty around the general election.

The number of homes coming onto the market is also dropping to historic lows, revealed RICS.

An estate agent from Jackson Stops & Staff in Chelsea says: “There will be a very cautious start to 2015 in the central London property market. Vendors appear reluctant to market their properties in the expectation of having to take significantly lower offers.”1

The amount of surveyors and estate agents reporting a drop in those looking to buy rose by 10% in December.1

New buyer enquiries decreased for the sixth consecutive month. Industry experts blamed stricter mortgage lending, in the Mortgage Market Review, and the typical slowdown of the market in the Christmas period.

Estate agents think that the Stamp Duty changes will drive sales to a 2%-5% rise in transactions around the UK.

Although there is a general negative outlook for London, estate agents in the north, the South West, Scotland, and Northern Ireland have witnessed a boost in buyer demand after consumer confidence spread from London and the South East.

Simon Rubinsohn, Chief Economist at RICS, explains: “The changes to Stamp Duty are expected to provide a timely boost to activity in the housing market across most of the country, but there remain significant challenges, particularly for first time buyers seeking to take an initial step onto the property ladder.

“Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping underpin the rental outlook for landlords pretty much across the whole of the country.”1

This comes after data from the Council of Mortgage Lenders (CML) revealed that lending in the buy-to-let sector is the only area of the mortgage market to have grown, while general lending dropped 12% in December.1