Central London Home Prices Tumble; Biggest December Decline In Six Years

Tyler Durden's picture

Bubbly home prices in London's most exclusive neighborhoods continue to deflate and have just recorded their largest December decline since the "great recession" in 2010.  According to Bloomberg, asking prices in London dropped 4.3% in December with inner London down 6%.  Meanwhile, the most exclusive neighborhoods, like Kensinton and Chelsea, have recorded even sharper declines at nearly 10% as home buyers have migrated to cheaper areas of the city.

“Alongside the seasonal slowdown, the readjustment of prices to match buyers’ greater reticence continues, especially in more expensive inner London,” said Rightmove Director Miles Shipside. “Buyers are being put off the really big-ticket purchases.”

 

In a sign of the disparity within the city, average prices in inner London are down 2.6 percent over the past year, whereas outer areas are up 2.7 percent. That left average prices across the capital little changed. The split partly reflects the luxury end of the market, where an April tax increase on property investors and worries about Brexit are sapping demand.

While overall home prices looked to be flat YoY...

London Home Prices

 

....central London prices have come under significant pressure as home buyers are migrating to cheaper areas.

London Home Prices

 

 

Of course, none of this should be terribly surprising to our readers as we recently analyzed home listings in Kensington and Chelsea, where we found something stunning: out of 130 pages of adverts, with 15 ads per page, nearly half of all properties, or 53 of the pages showed price reductions.

Page 1

 

... through Page 53

 

And it will only get much worse: there are 23 pages worth of property that has been on the market for more than a year.

 

The liquidation sales are coming.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Manthong's picture

..a lot of yuan down the John.

paddycomeback's picture

So you live in London. Dirty, smelly, crowded, full of foreigners, terrorist threat, collapsing infrastructure. Yeah enjoy your ten million pound house.

KittyKittyBangBang's picture

nice one @piddycmbac...... ...its a blimmin circus allrite.. .....specly out picadally way.. ........HA HA HA

land_of_the_few's picture

That's not the full picture. The "entire" UK housing market was overvalued, IMHO by at least 70% at its peak. Property prices have gone up many times since the acceleration point which was probably the mid 1980s. Back then you could get a large apartment in a reasonable city area outside of London for less than 40k. Now, you are talking 200k plus. Back then.people were rather stand-offish about getting their hands grubby with the whole idea of "buying a property they didn't intend to live in". Now  it's pretty much a case of rip off your fellow city inhabitants for as much as is legally possible, particularly if they are students or young office workers you can make them live like lab rats. And, from the point of outsiders looking in, UK houses are a bit lacking. Old ones are damp because they were designed for coal fires and now use gas instead... bye bye ventilation. Hence the bouncy floors near the windows- that's wet rot from condensation. And new ones are pathetic execu-shoeboxes made from the cheapest possible construction materials, and on top of that often badly put together in a hurry.

Greenspazm's picture

I agree with this but think that the property bubble started as far back as the the early 70s initiated by Anthony Barber's money printing spree and mortgage credit expansion orgasm.

IMO the property market is still overvalued to the extent that even price retreats reported in articles like the above  make only a hardly relevant indentation in what is still a huge bubble.

 

HenryKissingerChurchill's picture

the whole idea of "buying a property they didn't intend to live in". Now  it's pretty much a case of rip off your fellow city inhabitants for as much as is legally possible, particularly if they are students or young office workers you can make them live like lab rats.

I understand that is exactly the elite´s idea, we should all live in horrible lab rats conditions in yuge cities, while their offspring go surfing and hunting in off limits nature

gespiri's picture

Honestly, I don't even know what's so great about that city.....I avoid it like a plague and haven't been back since 2010 even though it's a hour's flight away.  BBLLLEEEECCCCHHHHH!!!

HenryKissingerChurchill's picture

Honestly, I don't even know what's so great about that city....

they have gazillion orwellian cameras, and those "stay calm" orwellian nudges, too

and a muslim major,

WHAT ELSE IS COOLER THAN THAT?

 

HenryKissingerChurchill's picture

So you live in London. Dirty, smelly, crowded, full of foreigners, terrorist threat, collapsing infrastructure. Yeah enjoy your ten million pound house.

and a muslim major right?

why would you pay a couple of millions to be surrounded by a YUGE MOB of morons that hate you... I wonder

HRH Feant's picture
HRH Feant (not verified) Dec 13, 2016 4:02 AM

Why would anyone live in London? It is infested with ragheads and the police are unarmed. Bad combination. Very bad.

kochevnik's picture

I was attacked by an African at Earl's Court.  I was in disadvantage carrying my belongings from Moscow, so bleeding from the head and staining my baggage.  Asked the Bobby for help with a description.  Bobby looked at me and asked "So what do you want me to do about it?"

Apparently London Bobbies have no idea what they are doing, and are only waiting for their take home pay

Pakistani keeper at the hotel said "he really beat you."  I got no credit for keeping my 50kg of baggage while he watched, apparently cheering

Pliskin's picture

How to type that trombone sound? Wah - wah - waaaah! I guess that's it!

mikkip's picture

It's just prime property over 2 million GBP so unreacheable to most and it's down to the tax changes and seasonal effect for december (as the guy explaines on bbg). So ZH don't sensationalize this and make it fit to your neverending CRASH narrative... you have cried wolf so much that I can't even be bothered to look out the window to check the sheep... 

Soul Glow's picture

RIght because real estate prices will always go higher.  Sounds like a sustainable economy to me; and you, since you are such an intellectual.

mikkip's picture

If the value of money is going down then why shouldn't bricks and mortar go up? Go suck a bag of dicks

Wile-E-Coyote's picture

These properties benefit no one, they were bought and left empty. One newish block (2010) in Kensington I know of had ten flats the penthouse sold for £47 million. In six years no one has lived in it, in fact, there is only one flat occupied. The building has a full concierge the easiest and most boring job in the world, a basement car park with only two cars in it; a dust covered Bentley and a Range Rover with a flat tyre, they have been there for months forgotten.

Outer London prices are still rising because  that's where the plebs live.

JohnGaltUk's picture

Its over and it has been over for sometime.

If it was'nt for the Osbourne subsidies the market would have collapsed long ago. Lending first time buyers the deposit is just folly.

House prices in the UK will collapse by 50%, I dont care because I got off the grid back in 2013. We all know what Von Mises says about monatary expansion.

History is crystall clear about this; the all mark of a society that is in the process of collapse is when they start printing money. It over.

Soul Glow's picture

Oh no not London!

Wile-E-Coyote's picture

The report forgot to mention the introduction of capital gains tax on foreign owners of property in the UK. 

These price falls have a long way to go........

scoutshonor's picture

London Falling-- 

:-) 

peterk's picture

in sydney australia, the world capital of personal mrtgage debt, which is  FULL RECOURSE i might add,  prices NEVER FALL.

Despite  all the  "signs" of economic bubble in property prices, price  NEVER COMES DOWN.

record debt.. no problem, unaffordable  prices no problem govt assistence.

 

The last fall in realestate was 1991....25 + years ago.. and that fall wasnt  a disaster like 1980.

The BIGGEST fall was in 1890's with  multiple bank collapses. Otherr than that  real estate prices have  ALWAYS gone UP.

Dont get me  wrong, i want it to crash. but the damn thing  just does not .

I think if it does one day crash it will have to do so in VERY QUICK TIME,  in order to  NOT ALLOW the GOVT to  step in. Industry and BANKS will have to collapse or interest rates  shoot up to 18% or so.

Only rates  shooting up   huge will prohibit the  government  from  "saving " the real estate market.

Prehaps..wishful thinking... TRUMP defaults on the national debt and rates SHOOT TO THE MOON

......wishful thinking

Twee Surgeon's picture

It's called SidRee in Chinese. SidRee, get used to that, it might be helpfull.

JohnGaltUk's picture

I have been keeping an eye on this for sometime. You have 2 or 3 generations in Oz that do not know what a recession looks like so they make the assumption that property prices always go up. It was the same with tulip mania.

I cant wait until it tumbles because it will be of biblical proportions.

Crusader75's picture

Markets fluctuate and go up, then down, then up again, then down again: who knew?

JohnGaltUk's picture

Except it will be different this time.

In the UK we will see declines in the 50% range and no recovery until 2030's.

Very simaler to what has happened in Japan when they topped out in 1992 and they are still 50% down today from their 1992 highs.

A lot of people are going to get burnt.

Moriarty Ragnarok's picture

This is actually good news - Londerners might actually be able to afford to buy their own homes at this rate

reload's picture

That is my sentiment too. I am 1.5 hours by road outside London, the top end of the market here - country houses and small hobby farms is dead. Very Little in the 1M+ bracket is selling, partly due to the stamp duty increases and partly because there is no longer any flow of `city` money being spent here. By train it is @60 minutes into Liverpool Street station, a 5 minute walk to the Bank of England, so City money has always supported the top end - not so much now.

But Below 500k the market is still pretty hot, lots of transactions happening fast, prices firm. One of my staff thinks he has at least doubled the 180k he spent on a fairly nice 1970`s Villiage house 4 years ago - and he might have. Emboldened by his notional wealth he is refinancing to buy 2 more and become a landlord. My secretary did this in 2007 and was declared bankrupt in 2010.

Cambridge (50 minutes drive) is going MAD - Chineese buyers doing a vancouver on it as we speak, and I think the market there has a way to run despite a number of big commercial projects being canned post Brexit. 

messystateofaffairs's picture

No smoking please, the forest is very dry.