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10% drop 'needed' in London

Tuesday, 10 June 2008 12:00 AM

Prices in London will fall a further ten per cent before hitting rock bottom, according to estate agent Cluttons.

At this point buyers will have the necessary 'safety net' to commit to the market, with protection against any future or further downturn.

"Willing sellers are using price incentives to get deals tied up and it's no longer about location, it's all about value," said James Hyman, a partner at Cluttons.

"A further ten per cent drop in prices overnight will bring value back to the market which will lead buyers to becoming more incentivised to commit to buy again."

However, given the present correction in prices, some areas of London have also become more available.

Buyers who were pushed out to less central locations 12 months ago are now flocking back to the premier streets of Holland Park, Chelsea and Belgravia where they can now find property in line with their budget.

"While the market is slow it is certainly not dead and well priced properties are now becoming available," added Mr Hyman.

"Buyers are shopping around for properties where willing sellers have already priced-in incentives and those who buy this summer will find themselves very well positioned when the market recovers in the latter part of next year."

According to statistics from the Department for Communities and Local Government (CLG), annual house price inflation in London was 7.6 per cent in March, down from 18.8 per cent in July 2007.

Wapping, with its proximity to Canary Wharf and access to the West End, appears to have been 'slump-proof', according to Cluttons, seeing price rises as opposed to falls.

As Mr Hyman explains: "Wapping is sat right in the middle of the city and the West End and as the city expands further east its better placed strategically, with fewer properties for sale and pockets of regeneration still going on.

"The closure of the East London Line has had no effect, in fact the reopening in 2010 is keeping buyers and investors interest here as it will give direct access to Liverpool Street.

Chris O'Toole

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