London Seeing a Decline in Property Prices

The latest research report from UK property company Knight Frank indicates that property prices in London are seeing a decline, having a 1.7% drop in June, which follows a 1.5% drop in May. Additionally, sales volumes have dropped by approximately 60% over the past year. While the overall market has fallen, prime properties are still relatively strong, and the demand for office space in the West End is still very high, according to the company.

 

Liam Bailey, the head of residential research at Knight Frank, commented that “The fall in prices that began in May has intensified during June, demonstrating that there can be no doubt that even property in prime Central London has been hit by the double whammy of the credit crunch and wider concerns over the global economy.”

 

While super prime properties, those priced above £10 million, are relatively unaffected, the lower priced properties are hurting the most. “Properties priced at under £1m are particularly suffering, as buyers here are more dependent on mortgage finance. Prices here fell by 2.3% in June, and now stand at only 0.2% higher than a year ago,” Bailey continued.

 

The company sees the market continuing to see slowdowns this year, but improving in 2009. There are currently a large number of tenants and homeowners who want to buy and sell, but are waiting for the market to improve.