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City workers forced to sell multi-million-pound homes
Mira Bar-Hillel and Peter Dominiczak20.04.09
CITY workers are selling off properties in some of London's most expensive areas as the credit crunch threatens to bring an end to the bonus culture, figures revealed today.
According to property website Rightmove a rash of multi-million-pound houses have recently come onto the market, sending the average asking prices in some areas soaring.
The average price of properties for sale in Kensington and Chelsea is now almost a third higher than it was a year ago as increasing numbers of expensive properties are put on the market.
The higher asking prices are being driven not by sellers in denial over price falls, but by expensive homes being sold by those who bought them with inflated bonuses but can now no longer afford to keep up their mortgage payments, experts said.
Noel De Keyzer, of property agents Savills, said: "We currently have 36 homes for sale in Kensington and Chelsea at £10million or more. Last year the figure was 24.
"This is the kind of figure which affects the overall average for the borough, shifting it upwards by more than £470,000." The average asking price increase is compounded by other figures, also released today, compiled by property website zoopla.co.uk. These suggest that some of the capital's richest homeowners are losing huge amounts of money on their property every day in the recession.
The values of some homes in expensive boroughs like Kensington and Chelsea have fallen by as much as £225,000 in just one year, the figures claim.
In Britain's most expensive street, Kensington Palace Gardens, also known as Billionaires' Row, the value of a large property has plummeted by £5million. At the other end of the scale, in the Olympic borough of Newham, the average asking price is 18.5 per cent lower than it was a year ago.
Experts claim Newham is suffering from the oversupply of flats bought to let over the last few years whose owners are now in financial difficulty.
A local agent, who asked not to be named, said: "Too many blocks of two bedroom flats were built here and sold for prices which were too high.
"Many are now being repossessed and marketed to sell, which is pushing the borough average down by £47,000."
Elsewhere in London average asking prices are around 4.1 per cent below last year's, compared with actual sale prices which are down by about 13 per cent.
The average figure, however, disguises wide differences between areas.
Rightmove commercial director Miles Shipside said: "In some parts of London there are some sellers who are willing to do deals at around 25 per cent below peak boom prices. That is giving more buyers the confidence to hunt out the best deals and buy.
"The London boom lasted longer than the rest of the country, so the turnaround is more marked.
"However, as the City is at the heart of this financial crisis, the speed of deterioration in activity has been equally rapid. Transactions fell very quickly to historic lows, though there are now some encouraging signs."
It now takes an average of 80 days for an offer to be made on London homes, down from 86 a month ago.
Rightmove does not predict a recovery of confidence or institutional lending this year. Mr Shipside said: "Some sellers are doing deals at prices adjusted to the new reality, though there also remain some real property black spots."
Borough | Apr-09 | Apr-08 | Annual Change (%) |
| Barking and Dagenham | £206,951 | £231,593 | -10.6% |
| Barnet | £473,762 | £458,181 | 3.4% |
| Bexley | £203,311 | £223,283 | -8.9% |
| Brent | £548,724 | £516,725 | 6.2% |
| Bromley | £307,811 | £330,081 | -6.7% |
| Camden | £748,539 | £717,154 | 4.4% |
| City of Westminster | £1,132,228 | £998,601 | 13.4% |
| Croydon | £250,012 | £286,406 | -12.7% |
| Ealing | £346,871 | £413,138 | -16.0% |
| Enfield | £300,017 | £318,116 | -5.7% |
| Greenwich | £244,176 | £259,543 | -5.9% |
| Hackney | £427,328 | £480,473 | -11.1% |
| Hammersmith & Fulham | £703,446 | £702,387 | 0.2% |
| Haringey | £437,143 | £413,983 | 5.6% |
| Harrow | £300,287 | £326,555 | -8.0% |
| Havering | £247,307 | £260,581 | -5.1% |
| Hillingdon | £319,997 | £346,766 | -7.7% |
| Hounslow | £409,623 | £463,540 | -11.6% |
| Islington | £548,677 | £544,596 | 0.7% |
| Kensington and Chelsea | £1,928,947 | £1,458,558 | 32.3% |
| Kingston-upon-Thames | £490,020 | £510,697 | -4.0% |
| Lambeth | £387,652 | £405,929 | -4.5% |
| Lewisham | £310,763 | £330,003 | -5.8% |
| Merton | £389,023 | £396,849 | -2.0% |
| Newham | £208,246 | £255,496 | -18.5% |
| Redbridge | £261,754 | £289,200 | -9.5% |
| Richmond-upon-Thames | £545,970 | £535,249 | 2.0% |
| Southwark | £355,832 | £377,473 | -5.7% |
| Sutton | £296,570 | £345,333 | -14.1% |
| Tower Hamlets | £370,844 | £403,545 | -8.1% |
| Waltham Forest | £256,378 | £297,555 | -13.8% |
| Wandsworth | £523,690 | £529,698 | -1.1% |
| Greater London | £387,161 | £403,545 | -4.1% |
Reader views (7)
Oh dear.
How sad.
Never mind.
- Stu, Milton Keynes
Of course this is based soley on your ability to believe anything an estate agent says.
Time to stop banging , 'we're all doomed' drum. Back to normality.
- Sandy, London
Similar story was in this paper a couple of months ago.
Generated no sympathy from me then. Nothing has changed.
- Trunk, US
Glad I don't live in Newham.
Not because it's suffered the greatest price drop, I'm just glad I don't live there...
- John, London
"The higher asking prices are being driven not by sellers in denial over price falls, but by expensive homes being sold by those who bought them with inflated bonuses but can now no longer afford to keep up their mortgage payments, experts said."
Forced sellers then then. If houses in that bracket that are for sale have increased by 50% in a year, then simple supply & demand rules suggests that prices are only going one way, and that's not up!
- Paul, London
Average asking price means nothing. It is arbitrary.
The final transaction price is a much more reliable indicator of house prices
- Graeme Carter, London, UK
You may be tempted to laugh, but this tends to have a trickle down effect. Much in the same way as increasing prices at the top end, pulled the bottom up with it in a rising market.
Labour did not manage asset prices, as warned by the late great Eddie George in 2003, now we all pay the price of a fast cooling economy.
- Dave Davies, Basingstoke
