An increase in the number of properties available for purchase is pushing down house prices. London group Savills, which primarily serves the upmarket residential housing sector, released current data that shows house prices are due to fall in third quarter reporting by 0.9 per cent in Knightsbridge, Chelsea, Belgravia, Mayfair and Marylebone areas. This will mark the first fall of house prices in this market since the first quarter of 2009.
“The froth that was evident in 2009 and early 2010 has definitely come off the prime London residential market in the last six months,” said Yolande Barnes, of Savills residential research.
The Savills research group keeps its eye on the strongest residential housing market which is those properties worth more than 1 million pounds in the ever popular central London area to gauge much of their opinions of the health of the economy’s important housing market. While prices are due to show a 0.1 per cent rise in third quarter in the central London area, this is a definite slowdown from the reported 1.0 per cent in second quarter. Values do remain 9.1 per cent greater than one year ago in 2009 reporting. Kensington, Holland Park and Notting Hill showed 2.1 per cent price increases from July.
Ms. Barnes credited part of the activity to overseas buyers but warned that uncertainty in the economy was causing more cautious buyers.
Ms. Barnes commented: “Continued activity from overseas buyers, still enjoying an exchange rate advantage, and domestic buyers, notably including those in the financial sector, has prevented unsold stock levels rising as they did in the wake of the credit crisis,” she added. “The stability of prices has accompanied a recovery in the value of equities in the third quarter, and the impact of the economy on the wealth and sentiment of buyers will continue to dictate activity levels and prices over the next 18 months.
“The backdrop of a generally uncertain economy means there is an emerging gap between buyer and seller price expectations, and with new buyer enquiries showing early signs of easing in the autumn market, there remains the possibility that we will see a shallow dip in prices over the next three to six months,” she added.