The gap between asking price and selling price for some of London’s most expensive homes has hit a 10-year high, with properties selling for an average discount of around 10%.
Last year, according to the latest figures from research company LonRes, properties in some of London’s most high-end postcodes had their asking prices lowered by an average of 10% before they were sold – which is the largest discount seen since 2008.
The prime central areas looked at in the data include parts Kensington and Chelsea, Canary Wharf, Richmond and Hampstead. Even outside these top-priced areas, the average amount that sellers have been forced to drop from their asking price is more than 9%.
Where vendors haven’t reduced their prices, many properties have been withdrawn from the market, meaning sales transactions have also fallen. In central London over 2017, the number of homes sold was down 3.6% on the previous year. In the final quarter of last year, of all the homes that left the market, more than half were withdrawn rather than sold.
LonRes head of research Marcus Dixon said: “People are going in with relatively cheeky offers, and sellers are accepting them. There’s a bit of realism creeping in about what properties are worth.”
Hikes and dips across the UK
After enjoying many years of a booming market, London property prices have been levelling off for several months now as transactions begin to plateau and investors start to look elsewhere to make the best yields and capital gains.
The latest figures from the Royal Institution of Chartered Accountants (RICS) show that there is still a great disparity between price behaviour in London and the south-east compared with the rest of the country. It reported growth in areas such as the north-west, the Midlands, Wales and Northern Ireland in January, while the capital’s market shrank.
RICS chief economist Simon Rubinsohn said: “Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than others.
“This is clearly evident in the sales expectations figures which still remain in positive territory in more than half of the areas surveyed in the report.”