News
Bright side to falling house prices
London house prices are falling at a record rate, making houses affordable once again, according to global property consultancy, Knight Frank.
Prime residential prices in central London fell in October by 3.9 per cent, the fastest rate of decline on record, and since the peak of the market in March this year, prices have fallen by 13.4 per cent.
The six monthly decline in prices (May to October) was 12.4 per cent, and all areas of the capital have been hit by falling prices – with only a minor differential in the rate of decline between houses and flats (which fell by 3.8 per cent and 4.0 per cent respectively).
Liam Bailey, head of residential research at Knight Frank, explained: “The market has been in decline in terms of sales rates for well over 12 months, in terms of price falls these began in earnest in March – although properties under £2m were falling as long as a year ago. However this general decline was given additional impetus in September and October this year.
“Up until the summer many vendors were holding to their pre-crunch asking prices. After what took place in the financial world over the past two months – an increasing number of vendors have decided to cut prices to achieve a sale. Our index shows this trend clearly – with the rate of month on month price falls gathering pace.
“There is a bright side to the price falls – they reflect the fact that vendors are now increasingly realistic about price levels and are more understanding about what prices are achievable. Whilst the market is still well down on historic sales volumes, the reassuring element is that sales volumes rose slightly during both September and October whilst prices fell sharply,” Knight Frank’s Mr Bailey added.
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