Rental values have continued to grow steadily in London, with vendor reluctance to sell resulting in an additional flow of stock to the sector reports Savills in its latest survey into the Capital’s property market.
The company expects rents to rise by 6 percent by the end of 2008. This follows a period when the value of prime central London property fell by 5.5 percent in the second quarter of 2008. This follows two quarters of less severe falls, bringing the total fall since the peak of summer of 2007 to 9.0 percent.
The latest Land Registry figures say that monthly house price growth in London currently stands at 0.8 percent, and the average house price at £354,714.
These figures also showed that average house prices in England and Wales remained flat in May, showing no monthly change at £183,266.
Annual house price growth shows a decline for the ninth consecutive month, with a change of 1.8 per cent.
The most up-to-date figures available show that during March 2008 the number of completed house sales fell by 50 percent to 53,080 from 106,047 in March 2007.
The North East experienced the most significant monthly price fall with a movement of 2.4 per cent.
Commenting on the London data, Yolande Barnes, Director of Savills Research, said: “Analysis of previous trends infers that history is, in part at least, beginning to repeat itself, with the more volatile prime London markets falling more sharply than the mainstream.
“This sector of the market is coming out of an extraordinary period of growth and a price correction should come as no surprise, particularly given the prevailing economic circumstances.”
“Whilst we expect to see further falls in 2008, leaving values down 15 percent year on year by the end of the year, and acknowledge the prospect of further falls in 2009, we do expect the prime central London market to be one of the first to recover, and to recover rapidly, potentially returning to growth in 2010.”
Holland Park, Kensington and Notting Hill saw the sharpest falls, down 11 percent in six months. The south-west areas (Fulham, Barnes, Putney, Richmond) saw falls of 8.6 percent in the same period.
