London Property 2008 first quarter. Are prices going to crash?

The first quarter of 2008 has seen the much talked about slow down in the London Property Market.



There is an obvious loss of confidence amongst buyers, and finally , sellers and their agents too.



This lack of confidence will result in better pricing and even a drop in the lower priced properties. In the case of prime London Property lower priced means below £5m!



Any price dips, however, must be put in perspective. New pricing should be looked at as more of a correction rather than a drop. 2007 saw an average of 30% increase in prices of prime London Property.



This unrealistic price increase will easily cover any perceived losses that the next 24 months may bring. The end result will be that London property is still a good investment.



Many buyers are holding back to see what will happen over the next six months. The highly qualified buyers, however, those who have spent many months even years chasing after prime property, are still actively looking and are willing to make the financial commitment.



Needless to say any one who is in negotiations to buy a property right now is driving a hard bargain. No one is willing to pay the inflated prices we saw in 2007.



Buyers are exercising extreme caution which is mainly driven by the fact that borrowing is harder and more expensive.



We hope to see more prime properties come onto the sales market as absentee non domicile residents put their London bases up for sale. This follows the exaggerated hype in the press about the effects of the change in non domicile tax status.



Those non domiciles actually resident and based in the UK are electing to pay the £30,000 and make no changes to their property ownership or living arrangements.



Also for consideration is the impact the new non domicile tax will have on employers hiring in London.



The property rental market is driven by the expatriates and their City jobs. Once the Easter school holidays are behind us and the traditional high season starts for big corporate moves we should have a clearer picture of the state of the rental market.



Traditionally as activity in the sales market slows down the demand for housing turns to renting. There is every reason that rentals will continue to be strong and rising since much of the available stock was sold by investors taking advantage of the 2007 property boom.