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London house prices are dropping… but demand is mega

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And now for some excellent or alarming news, depending on which side of the fence you’re on.

There have been a spate of surveys of late showing a cooling down in London house prices.

Last Monday, for example, research from Rightmove showed that average asking prices in all of London’s 32 boroughs have seen a drop, and the average price of a London home dropped by £30,000 in November alone.

Today, new figures also show declines.

Research from estate agency Haart shows London house prices fell 1.9% in November (based on listings at its 42 offices).

The average is being dragged down by steep falls in certain areas…

The big losers: 

South-west London (Richmond to Streatham): down 14% in past year

North London: down 6.7% in one month (November 2014)

Haart commented: “House prices in this postcode area [south-west London] have been particularly ‘frothy’ in the good times over the past few years, so will naturally see a more significant dip during the ‘cooling off’ period.”

Haart’s figures show that London house prices grew 7.9% in the year to November 2014, compared with a 7.8% UK average.

But demand in London is still enormous…

Elephant and Castle symbol

All that said, we shouldn’t expect a collapse in the London property market quite just yet, as there is still very strong demand.

Haart said there are on average 17.4 buyers chasing every new London property instruction.

That compares with 11 buyers per property for the UK average (and that figure will be brought up by the London average).

Haart is also seeing demand increasing following the Autumn Statement’s reforms to stamp duty.

Paul Smith, CEO of Haart, said: “As we head into 2015, 98% of buyers are set to make a Stamp Duty saving.

“The effect was immediate as we saw a 15% increase in enquires the day after the announcement as buyers who were previously reluctant to take a step onto or move up the property ladder suddenly had the door opened.”

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