London prices still falling

House prices in Prime Central London fell for the third consecutive month in July, this time by 1.6%. This means annual growth has fallen sharply, but remains positive, currently standing at 1.8% more than this time last year.

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However, regionally within Prime Central London there are differences in price. For instance the northern area from Mayfair to St Johns Wood is showing slightly positive growth of 0.6% over the past month. There are also wide differences in how different types of property are performing, according to the report, which found that houses are holding their value and still showing positive annual growth of 5.1% while flats are showing an annual fall of 0.9%.

However, the super-prime market continues to outperform any other, with prices going up by 1% in July, bringing annual growth in this market to 16.7%.

Liam Bailey, head of residential research at Knight Frank said: ‘Sales volumes have been a particular victim of the slowdown. Almost 50% fewer homes were sold in prime central London in July compared to the same month in 2007. New instructions have also fallen, and properties are now achieving on average less than 95% of their asking price.

‘Despite the current gloom, there are signs of life in the wider market,’ Mr Bailey added. ‘Properties are now staying on the market for less than 60 days before sale – the lowest level for six months. This may indicate that vendors are finally becoming more realistic and accepting the new market conditions.’

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