Buying London Property after the sub prime crisis

Throughout the month of August the news that the financial markets were in a crisis was the subject of discussion amongst many property professionals and their clients from various holiday destinations around the world.



Selling agents were confident that the sub prime crisis that started in the US would have no effect on prime London property and buying agents were quietly hoping that the news will make it easier to acquire properties on behalf of their clients during the last quarter.



Generally, all agreed, that by mid September when everyone is back from their holidays and children have gone to school it will be the time to tell where the property market is heading.



Traditionally prime property prices go flat when the market cools down and not down. The last 6-9 months, however, have been exceptional times. We have seen between 40-60% price increases in some areas and with certain types of property.



This means that there has to be a correction. Under normal circumstances the increases that happened in the last 3 quarters would have taken at least 2 years to be achieved so a reduction is a mater of opinion more like a correction.



As city buyers loose confidence and talks of low bonus are going around, bankers will hold off making purchases with big price tags. They are a substantial source of demand for prime property.



Sellers cannot continue to ask inflated asking prices and have to either hold off or ask more realistic prices, this doesnt mean taking a loss but less of a profit.



The good news is that buying will be an easier task, the anxiety and race associated with buying is so last season! Foreign buyers and Web 2.0 millionaires can now shop in peace.



Next quarter we should see some fair deals as a result of over stretched property dealers and developers.



If however interest rates go into double figures over the next 12 months, then we will see a whole different scene, one that was certainly before my time!