London property market crashes

London house prices crashed by an average 14.5 per cent in the last 12 months the fall accelerated through “a year of turmoil” with a drop of 2.4 per cent last month alone.

The worst hit areas were City of Westminister which plunged 21 per cent. The borough of Waltham Forest 17 per cent. Other borough breakdown reveals how even the current depressed values are far higher than levels at the start of the economic boom times nearly a decade ago.A borough by borough breakdown reveals how even the current depressed values are far higher than levels at the start of the boom a decade ago.

Even boroughs in the capital have seen at least a doubling of prices since then with three Newham, Hackney and Southwark – still averaging triple values not seen since 1997.

Most personal finance economists and property experts are agreed that prices have further to fall this year but some now believe that the decline is slowing and the bottom could possibly be reached by the summer:

The Bank of England is expected to cut its base rate again by this Thursday, lowering it to 1.4 or even one per cent, levels not seen since the formation of the Bank of England in 1964. Nationwide chief financial chief Fionnula Earley stated that cheaper mortgages and further falls in value could soon start to entice back first-time buyers who have been effectively “locked out” of the surging market since 2003

Earley estimates that nationally there are now as many as 750,000 first time buyers who want to buy, a huge pool of pent up demand that could put a floor under any further falls. She highlighted: “Clearly this estimation is fraught with uncertainty and sensitive to assumptions, but it does appear likely that a substantial pool of pent up demand has been building up which could make its way back into the market when affordability improves and economic conditions and house price growth expectations stabilise.”

The latest Land Registry figures show estate agents in London are struggling to sell in London are struggling to sell even one property a month. Only 4,351 homes and flats were sold in the capital during October, the exact period after the investment giant Lehman Brothers bank collapsed and the availability of credit exploded.