Prices for Top London Property May Be Headed Down
The London property market had been experiencing some of the highest prices in resent years but conditions appear to be changing in the United Kingdom now. Certain highly sought after post codes were able to command top real estate prices, but that was largely due to UK optimism and a surge in the economy that is no longer happening. This, added to a looming cap on bonuses, an upcoming general election and even higher levels of tax being levied against citizens, does not bode well for property prices as incomes get pulled down further. Although prices are currently rising, the real estate adviser Saville’s prime central London index shows that the increase actually slowed to an unimpressive 3 per cent over the course of the last 3 months which is a full 1.6 per cent lower than the same time period during 2009. Compared with the steady drop experienced for London property owners who held the best real estate in the city from the end of 2007 until the beginning of 2009, this is not that drastic. During that era, a mind blowing 22 per cent drop occurred and vendors even accepted up to 40 per cent discounts which could never have been expected in the past. With prices improving in the economy after the second half of 2009, an average of 4 per cent rise in value each quarter was seen. Peak levels of price growth for the best properties in central London are currently close to the peak of 2007, around 17 per cent annually.
Economists worry this may prove to be a tipping point for the market and advise investors to be wary.