London house prices crash by 3.9% in January

brit1234

London house prices crash by 3.9% in January


Prime London residential prices fell 3.7% in January 2009, the second highest monthly decline on record, according to the Knight Frank Prime Central London Index. Overall prime London prices have fallen 21.4% since the March 2008 peak, the important £1m to £2.5m sector has fallen 25.3% over the same period...

The super-prime £10m bracket is catching up with price declines after a period of resilience up to last August - losing 20% in value in the five months since September

Knight Frank Research has pushed its forecast for peak to trough pricing in prime central London down from 30% to 35% - it still expects to hit the bottom of the market in terms of prices in mid 2009

There is early evidence that the market is seeing increased activity from domestic and international purchasers - viewing levels have risen substantially - up nearly 65% in January 2009 compared to the same month in 2008

Demand from foreign purchasers has risen substantially with a year on year increase in foreign buyers registering in January of 35%, led by Middle East buyers (52%) and European buyers (38%) - with a particularly strong Italian (43%), French (49%) and Norwegian (51%) showing

The markets seeing greatest growth in viewing and applicant activity are led by the core of Mayfair, Knightsbridge, Belgravia and Chelsea - viewings here are up over 80% on a year on year basis

Liam Bailey, head of residential research, Knight Frank, commented:

"As we move into 2009 we are now almost 18 months into the credit crunch and the resulting economic downturn, both of which have had a rapid and significant impact on London's residential market.

"In early 2008 it was generally held that London's unique situation - with very strong demand set against weak supply - would help it escape the worst of the housing market downturn.

"Even when it became apparent that this was not the case, and the majority of the market was in sharp decline, the robust health of the super-prime sector led many to assume that the most expensive streets in the world's most expensive city would remain unscathed by falling prices.

"As we reached late summer last year, it became apparent that no part of the market was immune. Every area and type of property was hit by price falls and rapidly diminishing sales volumes.

"Our Prime Central London index and the more mainstream market trackers paint the same picture - prices are down by a minimum of 20%. Our own view of the peak to trough price decline in central London has been pushed out to 35%, although we accept that even this figure is in danger of being surpassed by the early summer. We would note that there is evidence that the prime new build sector in central London has seen price adjustments on at least this scale already, albeit in many cases even these new lower prices are yet to be successfully tested in the market.

"The primary reason for the unprecedented speed and level of decline is obvious in retrospect: the sudden restriction of mortgage finance. This factor is continuing to cause problems for the housing market and the wider economy - from buyers only being able to take advantage of record low interest rates if they have a 30% or 40% deposit, to businesses struggling to survive as they have limited access to only very expensive credit.

"Ironically, a more positive future outlook for the market to some extent depends on the speed of the correction. If we are to have a big price fall, it is much better that it happens quickly - this will prove painful for some, but is better for the majority in the longer term. In addition, the rapid fall in capital values has more than offset the recent decline in rents, meaning that rental yields are slowly increasing and investors are beginning to look very closely at the market.

"As a consequence of this new climate of vendor realism, there are indications that buyer interest is beginning to increase. We expect transactions to increase very gradually throughout the year in prime markets, and as a result price falls should begin to level out towards the end of 2009, although 2010 is likely to see prices move sideways at best.

"If the weakness of sterling continues, it will help to bolster demand from the foreign super-rich - partially compensating for the reduced earning ability of many City-based buyers. While the Capital might seem increasingly attractive to domestic buyers, the opportunities available look even better value from overseas as a result of the dramatic decline in the value of the pound.

"The weakness of sterling is unlikely to abate in the near future, especially as the UK base rate is set to fall further. However, currency markets are highly changeable and there is a general expectation that the Euro, in particular, will weaken later this year. As a result, many European buyers believe that there will only be a limited window in which to buy prime property at bargain prices. The prospect of a more expensive pound also provides them with a hedge against further falls in prices during the course of 2009".

:eek:

http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=10939&cat=44-0-0

chucky

it's not actually London prices that have dropped it's Prime London House Prices.
which you will not be able to buy or would even have anything to do with you.
are you trying to get attention again Brit?

how's the police force?

brit1234

Do you really think London house prices are not dropping fast? :rotfl:

Its a fact that we have seen the fastest price drops in history due to how overvalued and unsustainable the housing market was. The whole funding system which fueled the housing bubble is long gone and we are returning to normal lending.

With all the rising unemployment in the capital do really think prices will do anything but fall?

chucky

brit1234 wrote: »

Do you really think London house prices are not dropping fast? :rotfl:

some are yes - my area last month had an increase on LR. but don't let facts get in the way.
you're link is for PRIME London properties, so out of context.
you do know what Prime property is don't you Mr Policeman?

brit1234 wrote: »

Its a fact that we have seen the fastest price drops in history due to how overvalued and unsustainable the housing market was. The whole funding system which fueled the housing bubble is long gone and we are returning to normal lending.

this should be your signature - i've seen it in nearly every one of your posts.
the article was from an estate agent - since when are you believing info from an estate agent or is it convenient?? lol

brit1234 wrote: »

With all the rising unemployment in the capital do really think prices will do anything but fall?

London has had around 14% - you're saying 50% drops by December 2009.
that would be 34% in 11 months so that's over 3.3% every month for every one of those months :rotfl:

did you ever pay for those parking tickets that you got when you parked behind Blockbuster? :eek:

brit1234

chucky wrote: »

London has had around 14% - you're saying 50% drops by December 2009.
that would be 34% in 11 months so that's over 3.3% every month for every one of those months :rotfl:

Prices have fallen far more that that. If you are using land registry figures don't forget then the 3-4 month lag. You are also missing a whole years worth of falls from peak in your 14% taking it down over 25% already. Remember how the figures are compiled, ie a year before peak. Thats why people are quoting prices are now at 2003-2004.

When it comes to Christmas 2009 I'm sure people are going to put in cheeky offers. I have already illustrated a large number of properties in London that have come down 50% or close already and that doesn't include the auction prices.

chucky

brit1234 wrote: »

Prices have fallen far more that that. If you are using land registry figures don't forget then the 3-4 month lag.

excellent - it was LR, that would probably mean that with January's Halifax numbers i'll have a few months of HPI then.

i'm buying again Brit - most of my cheeky offers do get knocked back but some have got a bite

beingjdc

chucky wrote: »

some are yes - my area last month had an increase on LR. but don't let facts get in the way.

In fairness, last month for LR in London

Westminster went up 0.6%
Brent and Ealing went up 0.1%

and that's it.

Set against that the 4.1% fall in Islington, the 3.3% fall in Tower Hamlets, or the 3.2% fall in Barking and Dagenham.

chucky

beingjdc wrote: »

In fairness, last month for LR in London

Westminster went up 0.6%
Brent and Ealing went up 0.1%

and that's it.

Set against that the 4.1% fall in Islington, the 3.3% fall in Tower Hamlets, or the 3.2% fall in Barking and Dagenham.

i was quoting Westminster - it also didn't have any volumes against it, which would have been quite low so not really indicative anyway.

don't forget the above article is only for prime so anything between £1m and £2.5m - th above numbers wouldn't really be relevant only due to volumes of transactions as they would be low anyway.

novazombie

quote
"Our Prime Central London index and the more mainstream market trackers paint the same picture - prices are down by a minimum of 20%. Our own view of the peak to trough price decline in central London has been pushed out to 35%, although we accept that even this figure is in danger of being surpassed by the early summer. We would note that there is evidence that the prime new build sector in central London has seen price adjustments on at least this scale already, albeit in many cases even these new lower prices are yet to be successfully tested in the market. "

35% down already. Only another 15%drop and I will have to revise my 50% prediction. I think I will join the 70% club for London rices.

liebe911

Its not only the case with London the world over is facing the same situations.

pickles110564

Miss leading title, hardly a Crash with only falls of 3.9%. Brit not like you to go for a !!!!!!? news headline. 3 out of 10 you must try better.