Prime London property sales and rentals update summer 2008

Most selling agents are loath to admit that prices are coming down. Many will tell you; the market is flat; there is very little activity; lower asking prices and a host of other carefully chosen words but it is generally agreed that asking prices are down by 15% and are likely to go down a further 5% over the next 12 months.

As we have mentioned before another way of looking at this is that prices only went up 20% last year rather than the 30-40% increase that many prime London locations experienced.

The selling price reductions are at the lower end of the prime London market which is below £5m the rest is flat and the over £10m market, has not been affected.

There are certainly less buyers but there is still demand from highly qualified buyers. These buyers have a good knowledge of the market and know when a special property comes their way they have to pay what it takes to secure it.

In most cases these buyers are acquiring homes that they will hold on to for many years so even if they end up over paying in 10 or 15 years time it will not matter. It is very possible that the top end of the market will still see a slight increase over the next 12 months. Demand is less frantic but prices are holding out.

Sellers are cautious not to be overly confident and as such are willing to agree deals at slightly less favourable conditions. They know that a bird in hand is better than two in the bush.

Growing numbers of property investors and developers are choosing to hold on to their properties and rent whilst riding out the weak market conditions.

This has resulted in better quality properties coming onto the rental market demanding strong rents.

Tenants have become demanding and only want the newest and the best properties. Many traditional and older rental properties are not shifting and in some cases not even at huge discounts.

Traditionally this time of year is always quiet but once the kids are back at school and everyone is back at work we think that mid September will be a telling time