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London's new trend

12th January 2009 | back to article listings BACK    print this article PRINT

For those keen on investing in property, London has often been seen as a promising but expensive place. On the one hand, the attraction of a capital city with its economic power and glamorous reputation has meant London is a city in which many will want to live and work. The potential for rental returns or commercial property investment is obvious in such an instance. Yet at the same time this very lure has pushed up housing demand and led to prices soaring above the levels seen elsewhere in the country.

Those looking to invest in property now may be watching carefully to see if the present time offers a big opportunity to buy at a substantially lower cost, with the long-term benefits this could bring when the economy and property markets recover.

For this reason, it may be of particular interest to note that estate agency Chesterton and the Centre for Economic and Business Research (CEBR) have produced statistics that suggest a new trend: one where London is not outstripping the country for price rises, but falling faster instead.

This was the finding published today in the Chesterton CEBR House Price Poll of Polls, which works by combining the various surveys from different organisations and lenders. The conclusion was that over the last 12 months the UK as a whole has seen prices drop by 12.8 per cent, but London has experienced a 13.3 per cent decline.

One area that has been strongly hit appears to be the top end of the market. Knight Frank's Prime Central London Index for December revealed that this segment saw a fall of nearly ten per cent in the last quarter of 2008 and an 18.4 per cent plunge since the peak in March 2008.

While the fall for the most expensive homes of all (£10 million or more) was 8.1 per cent, Knight Frank noted that these have now started to fall at the same rate as the rest. Meanwhile, homes between £1 million and £2.5 million have seen the worst fall from their peak - some 22 per cent.

So for those investors who have an eye on the prime market, there may be many comparative bargains about. But it is not just in the prime central areas around the City and West End where large falls have taken place.

This was revealed by the latest Land Registry figures. These lag a month behind other data and as such the 10.2 per cent annual drop in the year to November 2008 may be a prelude to a larger measured decline in the year to December. Even so, this statistic still shows annual declines of over ten per cent in Ealing, Lambeth, Richmond, Waltham Forest and Wandsworth.

So for those who are looking for cheaper property in London, it may well be that good deals can be found all over the capital.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4575.html. Alternatively, please see our full press release archive.

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