New homes in prime London locations have fallen by a significant 11.5% during Q3 2008, according to Jones Lang LaSalle London Prime New Homes Index.
This follows a fall of 6.8% in Q2 and no change in Q1 2008.
The fallout from the global financial crisis and the impact this has had on the UK housing market, and on London’s financial sector in particular, are the main drivers behind the latest drop in London new home prices.
The 11.5% fall in prices of the sector’s new apartments during Q3 is more than twice the decline in mainstream property markets (old and new properties) in Greater London and in the UK as a whole.
These results confirm that prime and superprime London residential markets are also now faltering under the influence of the global financial fallout and the weakening housing markets elsewhere in the UK.
Part of the problem rests on sellers who remain unwilling to drop their asking prices - very few are forced sellers - and buyers are bargain hunters seeking price reductions. This stand-off is significantly impeding transactions and transaction levels, said JLL.
The average quality-adjusted price for a prime new home in prime London fell to £885/sq ft from£1,000 per sq ft last quarter.