With sellers facing up to the Christmas slowdown, asking prices in the prime property market continued to fall in November, according to Primelocation.com's latest House Price Index. Sellers putting their properties on the market in the run up to Christmas are usually highly motivated to sell, and price their properties attractively to appeal to festively distracted buyers. In this difficult market, sellers have started to discount their prime properties in order to achieve a sale.
London's asking prices were down by 3.2% from November 2007, though the Capital did record a very slight price rise of 0.1% over the month - the first rise in six months. After seven consecutive rises, property stocks declined in the past month, although they still remain 6% higher than this time last year. In the prime country market, asking prices fell for the fourth successive month (by 0.7%), but were still 1.6% higher than November 2007.
Thanks to the number of frustrated sellers flooding the market, the London lettings market continues to suffer from excess stock, and the growth in new instructions continues to outpace the growth in tenant demand. This has inevitably hit prices, which were down by 1.1% over the month and down by 4.06% year-on-year.
All regions of the capital recorded falling prices, with West/South West London (-12.9%) faring the worst. Savills recently noted a similar trend and point out that South West London, an area favoured by City workers for family homes, has seen a sharp fall in demand.
Primelocation.com's Head of Insight, Andrew Smith, comments: "If this trend develops further, committed and realistic sellers should return to the market and help ease the current deadlock between buyers and sellers. However, we expect rents to remain subdued in the months ahead as further job losses and a weakening economy continue to take their toll."