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London Property Prices Down 20 Per Cent

Wed, 15 Oct 2008
Property selling prices in London have fallen by 20 per cent since last summer and will continue to fall in 2009, claim estate agents Kinleigh Folkard and Hayward (KFH).

The London-based firm said its own experience in the capital during September indicates prices have already fallen 20 per cent from their peak in the summer of 2007, with 10 per cent wiped off values so far this year.

The company said house prices have become overheated in the capital due to "irresponsible lending", and claims many asking prices are overly optimistic.

KFH managing director Lee Watts said: "Some institutions and commentators have announced falls of between nine and 12 per cent, but I would say based on London alone, these figures are wildly inaccurate."

The estate agency predicts the number of transactions on London’s housing market is likely to plummet to around 600,000 by the end of this year - half the number recorded by the Land Registry in 2007 – due to a lack of finance in the market following the sustained boom of the past decade.

Mr Watts said the average gap between asking prices and selling prices in London is currently around 14 per cent and expects prices in the capital to fall by a further four or five per cent early next year.

"People will always need to move, and as we progress into 2009, I predict we will see a change in the supply:demand ratio for property, and albeit slowly, with increasing levels of activity and transactions as the year progresses," Watts added. .
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