Almost 30 per cent of London homes are being advertised for sale with reduced asking prices, while realistically-valued houses and flats are sold within just 71 days.
A new report shows that in some parts of the capital a third of sellers have trimmed their prices, with more asking prices reduced in west London than any other part of the capital in a price-sensitive market.
While the data doesn’t take into account the number of asking prices corrected by estate agents within the first few days after being listed, Rightmove also released a report this week warning sellers that they could pay dearly for over-pricing homes.
In the past 10 years, lack of stock and high demand has pushed up housing prices across the capital, while in west London the ‘Crossrail effect’ has particularly boosted prices, as buyers sought to invest in areas due to benefit from the high-speed link to central London.
"Prices in areas such as Ealing have risen so much due to Crossrail that they couldn’t possibly carry on going up at the same rate. We now may be starting to see buyers push back a little as they feel prices have reached unaffordable levels," says Alex Gosling, CEO of online estate agents HouseSimple.com, who provided the data.
Buyers are particularly cautious because of a combination of market uncertainty and last year’s stamp duty increases. In recent years, buyers and sellers relied on a market where prices were almost guaranteed to rise by around 20 per cent in a year, but that is no longer the case.
Reduced asking prices are in part a natural correction of a market which is catching up with a slower pace of growth than in recent years.
Falling house prices
The 10 boroughs that have seen the largest price reductions by % in January 2017
Richmond has suffered the largest number of cuts, with almost 37 per cent of listings reduced in price.
Richmond upon Thames was named as the happiest place in the capital last year, with the residents being among the healthiest and wealthiest in the country. House prices average £643,000, a modest 0.4 per cent rise on last year according to the latest government house price report.
Paul Price, manager of estate agents Hamptons International in Richmond, says: "there’s been a shortage of good quality properties for the best part of two years and the strategy for some estate agents trying to secure instructions is to over-price homes. So we’re not necessarily seeing a fall in values but more realistic asking prices.
"The Richmond market is bulletproof, there’s a huge underlaying demand for property at the right price,” says Price.
Hammersmith and Fulham
A similar 36 per cent of sellers have dropped their asking prices in neighbouring Hammersmith and Fulham, the second highest in the capital.
However, the average sale price has also dropped in the area from £772,000 to £756,000 over the past year.
"Fulham has always been very City-orientated in terms of buyers, and the mood of the market reflects the mood of the City fairly accurately,” says Hamptons branch manager, Robert Stewart. "People are more nervous about the future because there’s a lot going on in the world."
As one of London’s cheapest boroughs, Hounslow should be in fairly high demand, with buyers looking for more affordable options. However, the decision to award Heathrow the long-awaited third runway is likely to cause an increase in noise pollution and the larger footfall passing through the airport is also likely to add to congestion on roads and rail links.
"As a result, many have been deterred from buying, which has resulted in falling demand within the local market," says eMoov founder Russell Quirk. "But not only are sellers lowering their prices to account for this cool in buyer demand but also to secure a sale so they to can vacate the area."