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Docklands homes fall by £72,000, but prices elsewhere are on rise
Mira Bar-Hillel and Jack Lefley16.02.09
Asking prices for homes around Canary Wharf have plummeted by more than 16 per cent in the last month as the banking crisis continues to hit prices near London's financial centres.
Almost £72,000 was wiped off the average asking price in the area in a matter of weeks.
New figures released today show that the average in Tower Hamlets fell from £448,071 in mid January to £376,103 by the middle of this month.
Experts said the fall was caused by fewer expensive homes coming up for sale in the east London borough.
But sellers in many other parts of London reacted to the economic gloom differently to help push average asking prices higher during the same period.
Kensington and Chelsea saw a sharp rise in the number of people wanting to sell top-end homes. The average asking price in the west London borough was up by more than £200,000 in February to nearly £2million - a rise of almost 12 per cent.
In Richmond-upon-Thames it rose by nearly six per cent (£30,000) from £517,661 to £547,911.
Average asking prices rose in 18 London boroughs, fell in 14 and stayed the same in Brent.
Across London as a whole asking prices were almost unchanged over the month, in spite of sale prices falling sharply, the figures from property website Rightmove showed.
But there were massive local variations, reflecting the differing fortunes of owners in different parts of the capital.
A spokesman for property search website Rightmove said: "The London picture has been distorted in recent months by a dramatic shift in the mix of property coming to market, indicating external influences are forcing some sellers to act differently.
"In Canary Wharf, the number of properties marketed above the average price in the last month has decreased.
With the area being recently developed and greatly dependent on the health of the financial services sector, it will be prone to more volatility."
He continued: "In January we saw a large increase in average asking prices, with over double the number of £750,000 to £1million properties coming to the market compared with the end of 2008. These sellers were forced to market quickly after the turmoil affecting some City institutions in the autumn.
"Now the number of properties above £750,000 has dropped substantially, to be replaced by lower value properties as the impact of the downturn forces sales further down the ladder."
The opposite has happened in Kensington and Chelsea, though the troubles of the City are the common cause.
There has been an unseasonal surge in properties in excess of £5million pounds coming onto the market in the last month.
Inquiries to Rightmove have doubled since last year, showing growing interest by buyers keen to spot bargains
Director Miles Shipside said: "This is a new record for us and indicates a pent-up demand. Buying opportunities on the way to the bottom of the market are traditionally more plentiful than those on the way up, and sellers are more open to low offers.
"Agents are reporting greater activity, though prospective buyers are being cautious."
Reader views (15)
We aren't fooled by the increase in asking prices. They aren't selling at those prices.
Agents are valuing properties far above that they can realistically achieve in order to get the business.
Buyers know that we can check the Landregistry and other on-line resources and make offers based on what is actually selling.
What agents are doing is simply prolonging the pain for deluded sellers.
It's going to get worse.
- Flopsy, Marylebone, London
I am sorry but asking prices have little value in this market. We are currently looking for a new house in London and it is obvious that certain estate agents are overpricing properties firstly to get the properties onto their books and secondly to compensate for the 20-30% off asking prices that buyers are offering. Having being looking for over a year it is still however very frustating looking at overpriced properties with vendors and estate agents who are unrealistic that we are in severe recession and are delusional in thinking house prices will not fall further.
- Ad, London
people can ask what they like for their properties, but at the end of the day it is what the banks surveyor deems fit for the property and if the buyer then still pays the higher asking price of which it would be because all properties are being down valued by the banks , more fool the purchaser as then the vendor has released his problem on to the purchaser, when will all the idiots learn to bid down rather than up.
- Derrick Devonport, london uk
I am sorry but talk of any sort of rise is utter nonsense. I have been watching the auction prices and they are not rising they are steady/falling still.
The two main London based property auction houses publish their results on the same day of the sale online. Seeing is believing. Decent one bed flats with a bit of garden/yard can now be had for £150k at auction, estate agents were asking £250k for the same properties a year ago and some still are which is why they are closing down. Agents and sellers are in denial.
Before you try to buy go to auction and learn the REAL market prices.
- Undercover Elephant, London, UK
One of the worst aspects of so called broken Britain is the media obsession with house price increases.
Do you all not realise that over inflated house prices is good for no-one? Pricing the young out of ever owning their own house unless they debt themselves up to the eyeballs.
It makes me sick that our government and media laud this sad, greed driven obsession.
- Lb, London
Interesting but if all prices have been inflated by sellers then why not theses, are sellers on Canary Wharf more realistic ?
- Harry, London
Asking prices are fictitious, only sale prices should be reported as that is the true value of a home / area. It is irrelevent that asking prices went up in these certain places, this just means this people are out of touch with reality. Lets wait and see what actually sells.
- Nick Nack Paddy Mac, Kiburn, London UK
To calculate the value of your home, just take 30% off what you think it is worth.
- Mike, London
Prices may have increased fractionally but the actual volumes of sales have decreased month on month meaning that derived indexes are becoming less reliable due to the non availability of sales data.
- Bob, Cheam
Pent-up demand is one of the great fallacies of the bubble. There's pent-up demand for Aston Martins and holidays in Barbados but without very cheap and available credit this aspirational demand is not going to materialize into purchases.
People can shove up the asking prices of their homes as much as they like but whether people are prepared to pay and banks willing to finance that's a completely different matter.
Shipside is the Arfur Dailey of property. Always looking for a nice little earner and to rip-off punters.
- Neil, London
Median prices is no solution as both methods depend on reasonable sample sizes. If you only have 3 sales then your median is more likely to be wrong than the average. The problem in the UK at the moment is there are very few sales not the method of calculation.
- Stuz Graz, Wimbledon, England
Here we go again.
Over-price housing was thepart cause of this mess.
- Bernard Parke, GUILDFORD
"Almost £72,000 was wiped off the average asking price in the area in a matter of weeks. .... Experts said the fall was caused by fewer expensive homes coming up for sale in the east London borough."
They should follow Australian practice and report the median price (i.e. half the homes sold for more than this, half for less). This way the 'average' isn't swayed by freak prices at either end of the scale.
- Tonyb, Melbourne, Australia
I think those increasing the asking price of their house need a reality check. How many buyers can sell their existing house and get a mortgage for the new one. A classic case of those in the business of selling property trying to talk up the markrt. Prices will continue to fall thro'out 2009
- Trevn, Abu Dhabi
A rise in the asking price no way guarantees a rise in the price a house actually sells for. I guess vendors are allowing themselves a bit more room for negotiation.
- Paul, London
