Bubbly home prices in London’s most exclusive neighborhoods continue to deflate and have just recorded their largest December decline since the “great recession” in 2010. According to Bloomberg, asking prices in London dropped 4.3% in December with inner London down 6%. Meanwhile, the most exclusive neighborhoods, like Kensinton and Chelsea, have recorded even sharper declines at nearly 10% as home buyers have migrated to cheaper areas of the city.
“Alongside the seasonal slowdown, the readjustment of prices to match buyers’ greater reticence continues, especially in more expensive inner London,” said Rightmove Director Miles Shipside. “Buyers are being put off the really big-ticket purchases.”
In a sign of the disparity within the city, average prices in inner London are down 2.6 percent over the past year, whereas outer areas are up 2.7 percent. That left average prices across the capital little changed. The split partly reflects the luxury end of the market, where an April tax increase on property investors and worries about Brexit are sapping demand.
While overall home prices looked to be flat YoY…
….central London prices have come under significant pressure as home buyers are migrating to cheaper areas.
Of course, none of this should be terribly surprising to our readers as we recently analyzed home listings in Kensington and Chelsea, where we found something stunning: out of 130 pages of adverts, with 15 ads per page, nearly half of all properties, or 53 of the pages showed price reductions.
… through Page 53
And it will only get much worse: there are 23 pages worth of property that has been on the market for more than a year.
The liquidation sales are coming.