The values of residential property in central London are not immune to the credit crunch, according to new research from Savills.
Values dropped by 2% in the final quarter of 2007, with particular falls in the sub £2m market.
Lucian Cook, director of Savills Research said: ‘This small fall comes as no surprise. We anticipated a fall of 3% in the final quarter of the year, in expectation that the market would react in a similar manner to previous financial shocks and reduced bonus expectations amongst City buyers would bite.’
Annual growth in the central London residential market is still running at 16.3%, and the top-end of the market continued to show resilience, according to Savills. The report said: ‘Whilst annual growth in the £5m plus bracket has reduced substantially, this is largely because figures at the end of the third quarter took into account the exceptional increases in values which occurred between September 2006 and March 2007.’
In Q4 2007, values in the £5m plus bracket increased by 2.5%. Prime property in South West London, including Richmond and Fulham, increased by 0.6%. Savills predicted a 5% growth for 2008.