Property owners across prime central London could be losing thousands of pounds over the next year, if house prices continue to drop at the same rate recorded by the Land Registry.
This latest warning arrives from online estate agent eMoov.co.uk, which has analysed recent figures from both the Land Registry and Rightmove.
Data released by Rightmove last week shows the disparity between the property values expected by prime central London property owners and the reality in the current market. The property portal has recorded an increase in prices of 6.9% within the luxury London market. However, the Land Registry has found that across London’s five most prestigious boroughs, prices have remained static over the past month.
Two boroughs experienced a decrease in prices over the last month – Islington, by 1%, and Westminster, by 6%. Meanwhile, Camden saw a decline of 3% over the year.
The 6% drop in Westminster house prices equates to a loss of £65,076 in just one month, from the previous average property value of £1,029,884 (or £2,099 per day). Should this rate of decline continue over the next year, property owners in the borough would lose 72% of the value of their home (or £741,516).
Similarly, property owners in Islington saw their home depreciate in value by £7,171 over the last month (£231 per day). Although property in the borough isn’t deflating at the same rate as Westminster, this rate of decrease would still cause a 12% drop over the space of 11 months, should it continue. This would result in a loss of almost £600,000 (£597,297).
Although Camden has experienced a brief resilience in price growth over the last month (1%), the borough is still down on an annual basis. Property values in Camden have fallen by £21,842 since October last year (£60 a day). The same rate of decrease over the next year could see the average house price in the borough drop to £776,059.
The Founder and CEO of eMoov, Russell Quirk, comments: “The property market in prime central London has taken a beating in the past year, but, despite this, homeowners are still pricing their properties unrealistically for current market conditions. Although the London property market remains stable, despite buy-to-let Stamp Duty changes and the referendum, the upper end of the market is dwindling in desirability.
“It is unlikely that the rate of decline seen over the last month in the likes of Westminster and Islington will remain consistent over the following 11 months, but this research stands as a warning to London’s most prestigious homeowners of what could happen and evidently already is.”
He continues: “The latest figures from Rightmove show that homeowners in prime central London are somewhat in denial pricing their property way too high. Their once trendy townhouses and flats are no longer as sought-after as they once were, and, if they want to secure a sale, they need to price their property realistically for the current market climate. Holding out for that extra £10,000-£70,000 today could result in a loss of hundreds of thousands of pounds this time next year.”
Do you own a property in prime central London? You must be aware of how your investment is performing under current market conditions.
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