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July 17, 2008
Update: London Market
Home sales once again fell to their lowest level in 30 years last month and according to the Royal Institution of Chartered Surveyors, the number of people moving house is at its lowest level since surveyors started collecting records in 1978. There were 15.3 transactions per surveyor during the three months to the end of June, nearly 40 per cent lower than the same period last year. Whilst UK house prices fell by 2 per cent in June, according to the UKs biggest mortgage lender, the Halifax, can the same be said for the more affluent parts of London.
The good times appear to be over for home-owners in London and few remnants of last year’s record-breaking boom, in which prices were driven up by international buyers and good years in the City, remain. In very central parts of prime London there is still a shortage of certain kinds of property such as substantial apartments and major homes in Belgravia and Knightsbridge, while in Chelsea a slight resistance is creeping in to four or five-bedroom family houses, of which there are now more on the market. Savills this week issued a bleak trading update warning that sales in the previously immune prime market had almost halved, with prices down 7.5 per cent this year. Yet, just as he advised that further declines are likely, Jeremy Helsby, Savills chief executive, said demand for super-prime homes continues unabated, at least for now. The question is, whether values can hold firm in secondchoice areas, which graduated to the prime league only recently. Fine victorian homes found in Islington’s historic estates of Canonbury and Barnsbury have been holding their values well and in three of the past four months the area has been among the top five London suburbs, with consistently rising asking prices, according to the website Rightmove.
According to the Land Registry, house prices in Kensington & Chelsea, Westminster, Merton and Richmond are up whilst in areas such as Fulham, Lambeth and Hackney, house prices are down. Investors who have the funds are looking to buy discounted properties to hold onto and rent until the market recovers. However, at the moment there is not a lot of investment buying, even though many investors out there have the cash, but they believe that we have not yet reached the bottom of the market. All will depend on what the world economy as a whole holds in the autumn.