Housing market bubble BURSTING: Top prices tumble AGAIN sparking fears of CRASH
05-04-2016
HOUSE prices in Britain’s wealthiest areas sank at an even faster rate in April than the month before, with estate agents saying the plunge is reminiscent of the 2009 market crash.
Buyers in London have become more "hesitant" and desperate sellers are now dropping asking prices by more than 10 per cent, estate agent Knight Frank warned.
And price drops have spread across the country, with most regions feeling the squeeze, separate data showed.
The slump has been sparked by a new stamp duty tax that came into effect in April.
In exclusive Knightsbridge home values have dropped by seven per cent in the year to April, from 6.8 per cent March, Knight Frank found.
Prices in Chelsea in the capital are now down three per cent year-on-year, while South Kensington has seen falls of 4.9 per cent.
Overall prices for 'prime' central London homes increased by just 0.5 per cent in the year to April from 0.8 per cent, according to Knight Frank.
This is the lowest rate in six and a half years and means annual growth has been below five per cent for 16 consecutive months.
Tom Bill, head of London residential research at the agent, said: "To put that into perspective, annual growth did not exceed five per cent for 17 months in the period preceding and following the collapse of Lehman Brothers."
The three per cent stamp duty surcharge on landlords and investors, which came into force on April 1, helped slashed the amount of transactions taking place by around half.
Buyers have now become much more "price-sensitive" and are taking taking much longer to make offers, said the estate agent.
Fears of a "correction" in at the top end of London's market have been gathering pace this year, with developers taking longer to offload new-build homes.
But other parts of the capital are still booming and the average price in London reached £534,785 in March, according to official figures from the Land Registry.
However, there are signs of a wider slowdown across the country, with prices in all regions except London and the East of England falling from February to March, Land Registry data showed.
The biggest fall was in York and Humber where values dropped by 2.6 per cent over the mont to March, followed by the West Midlands with falls of two per cent.