record stock levels of prime London property in October 2007 lead to further falls in average sale prices

The most notable change in the prime London sales market this month is the surge in the number of properties for sale in October. Indeed, a 54.6% increase in property volumes, compared to this time last year, has helped turn a seller’s market into a buyer’s market in a very short period of time.

With fears of a possible fall in property prices, Londoners have been quick to get their properties on the market to maximise their chances of a profitable sale, with annual prices up 19.0% on last year, culminating in a 12.9% increase in stock since last month alone. However, buyer caution is becoming more widespread, with potential buyers reluctant to make a purchase in case prices decline further over the coming months.

For the third consecutive month, prime London property prices have declined, with prices in October down 0.8% on last month. Since August 2007, the average price of a prime London property has fallen by over £22,000. However, the ‘super-prime’ market (properties worth over £5 million) is withstanding the bumpier conditions witnessed in the wider property market and this is reflected in Central London, where prices have increased by 1.5% on last month.

Ian Springett, Chief Executive of Primelocation.com, comments, “These are testing times for the prime London sales market. In just three few months, we’ve witnessed a rapid transformation - from constrained supply and intense demand fuelling vigorous price rises, to buoyant property volumes and dwindling demand causing a decline in prices. Demand for prime London property from City employees is expected to be significantly lower than in previous years, too, with bonuses predicted to be more modest and market uncertainty expected to deter some buyers. Overall, we expect property prices to decline gently for the remainder of 2007.”

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