In Central and West London, property prices have fallen by up to 25% over the past twelve months and are expected to continue to slip in the first half of 2009, though the rate will be considerably slower.
However the worst is over according to London estate agent, Marsh & Parsons. They are predicting a peak to trough fall in house prices of 30% in the capital – prices have already dropped significantly and buyers are already back in the market.
Managing director, Peter Rollings:: “London was first in to the downturn and it will lead the way out. We’ve already seen the worst of the credit crunch impact on London’s property market – it’s not going to recover immediately, but I’m confident we’re near the floor – each week sees more buyers back in the market.
In order to stoke recovery, the government must work with lenders to make mortgages available to buyers. We know there are people out there who want to purchase their first home, or move house – but the lack of mortgage finance is still debilitating.”
Rare opportunity for London bargains
The deteriorating health of the market at the end of 2007 encouraged large numbers of people to rent rather than buy while the market stabilised. Tenants registering with the agent were up over 50% in the first 9 months of 2008 compared with 2007. But those who rented in 2008 will come to the end of their one year tenancy in the early months of 2009.
For people wishing to invest in a home or a buy to let for the mid to long term, the 2009 market presents a rare opportunity to buy at, or very near, the bottom – maximising potential capital growth.
“We’re already seeing the number of buyer registrations rise – they’re up by over 30% in the last month as intermittent renters think about re-entering the market,” Rollings continued. “I’m expecting to see a large influx of potential buyers in the first half of 2009 which will help to balance the supply/demand equation – in turn stabilising property prices.
“Mortgage rates are starting to drop and the price of money looks set to fall still further, tempting people back into the market for the first time as buying becomes substantially cheaper than renting. Together with the lowest house prices in years, there are some fantastic opportunities to get a step onto or up the property ladder.”
