Graham Norwood's July Review - London Property Market

It’s going to be a long hot summer in the city – and a slow one too.

The market’s top end, including almost all properties in central London, is still modestly strong compared with the outer boroughs which have major price falls. But even in these prime areas, transaction volumes are collapsing as buyers wait to see what happens in the autumn.

Data from Hometrack, using estate agents’ figures, shows major rises in the numbers of viewings and length of time it takes before a seller secures an acceptable offer; the agreed sale price is now, on average, almost 10% below asking price – which itself it lower than it would have been at the start of the year.

Wealthy buyers may be too rich to worry about interest rates but they do know how to find a bargain. At the moment, that’s done by simply waiting.

Some 60% of all property deals are discretionary (that is, people don’t have to move but just want to move) and this group is now sitting on its hands over the summer in anticipation of further price falls from September.

The real culprits of this crisis – banks whose practices prompted the freefall in confidence – need to act to steady the property market in London and elsewhere. And soon.

Graham Norwood, Property Journalist
June 2008