The lastest Knight Frank index shows that prices in central London fell by 3.6% in November, the second largest fall afdter october's record of 3.9%. This puts prices at 14.1% lower thgan last year.
However the weak Pound is stimulating interest from foreign property buyers which may give some hope for sellers.
'In previous months we noted that super-prime properties had remained immune from the downturn, and that houses were performing better than flats. Neither of these trends have continued into the final quarter of the year,' said Liam Bailey, head of residential research, Knight Frank.
Super-prime property worth over £10 million was still increasing in value until the summer. Now, however, it has seen three months of consecutive falls and values are 7.5% lower than at the market's peak in August. Nevertheless the report shows that properties worth over £5 million are still holding value better than cheaper homes, with values falling by 1.9% during November, compared to 4.3% for those priced at under £5 million.
'The last few months have seen vendors gradually accepting that prices need to be cut if a sale is to be achieved. The rate of transactions in most of our offices appears to be increasing, albeit from a low base. Indeed, last month's record fall of 3.9% may have reflected a sudden adjustment in expectations, explaining why the rate of decline has fallen back slightly to 3.6%,' added Bailey.
It does mean that prime London property is increasingly looking like very good value, particularly to foreign buyers who also benefit from the weak pound. 'Indeed, a fall of 15% may translate to a fall of as much as 35% to someone watching the market from the US, as the pound has fallen by 20% against the dollar since the beginning of the year. There has been a increase in interest from such buyers over the past few weeks, which has not yet been translated into activity,' he predicted.
The report concludes that further price falls are to come. 'However, as many prime properties are unique and only occasionally come up for sale, we believe activity will increase as overseas buyers realise the home they have had their eye on for some time is now available at a much reduced price,' he added.
