London Prices set to fall by 14% in 2009
A recent report by Savills, a real estate adviser states that London’s luxury property market is expected to devalue by another 14% next year and that the total decline over the two-year period 2008-2009 may be 30%. This is slighly more pessimistic than their April report, which suggested a decline of 25%.
The report also states that prices for properties costing in excess of £1 million are likely to fall at a faster rate – 20% this year, because of reductions in demand from people employed in the financial services sector. The center for Economics and Business Research stated that London may lose as many as 62,000 jobs in the financial sector, which has long been the driving force behind London’s luxury real estate, along with a reduction in bonuses of 60% or £3.6 billion.
We’re not expecting any bonus money to go into the market this year and next. Any recovery is not going to be fueled by the central financial hub. Lucian Cook, Savills.
Prices in the “Super prime” market have also fallen around 20-25%, despite the falling value of the pound.
The report also suggests that London will be the first British market to recover, but this was unlikley to start happening until 2010, probably later for the rest of the country.
