The latest research released by online estate agent eMoov.co.uk, highlights that homeowners in parts of prime central London (PCL) could lose hundreds of thousands of pounds over the next year, should house prices continue to fall at the same rate reported by the Land Registry last week.
Figures also released by Rightmove last week show the disparity between the price expected by PCL homeowners and the reality of the current market. Rightmove shows an increase in prices of 6.9% within the top tier London market, however data from the Land Registry shows that across London’s five most prestigious boroughs prices over the last month have on average remained static.
Two boroughs saw a decrease over the last month; Islington at -1% and Westminster at -6%, with Camden also seeing a drop of -3% year on year.
The -6% drop in Westminster translates to a loss of £65,076 in just one month from the previous average house price of £1,029,884, just under £3,000 a day (£2,099). Should this rate of decrease continue over the next 11 months, homeowners in the borough will lose 72% on the value of their property (£741,516).
Likewise, homeowners in Islington saw their property depreciate by £7,171 in the last month, £231 a day. Although property in Islington isn’t haemorrhaging value at the same rate as Westminster, this rate of decrease would still see a -12% drop over the space of 11 months should it continue at this rate. This would result in a loss of nearly £600,000 (£597,297).
Although Camden has seen a brief resilience in price increase over the last month (+1%), the borough is still down year on year. Property in Camden has decreased by £21,842 since this time last year, a loss of £60 a day. Just the same decrease over the next year could see the average house price in the borough fall to £776,059.
Russell Quirk, founder and CEO of eMoov.co.uk, commented:
“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, in Islington, will remain consistent over the following eleven months, but this research stands as a warning to London’s most prestigious homeowners of what could happen and evidently already is.
“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.”