New prime residential property prices in London plummet

New residential properties in prime locations in London have seen significant price falls, probably due to the impact of the credit crunch on the City of London finance industry, according to a new report published today.

Prices fell by a significant 11.5% during the third quarter of 2008 on top of a 6.8% fall in the second quarter, the Jones Lang LaSalle London Prime New Homes index records.

The 11.5% fall in apartment prices is more than twice the decline in mainstream properties, the report points out.

Analysts blame the effect of the global finance downturn on London's finance sector for the decline. There is not as much money around as there was a year ago and those who have it are not spending.

'These result clearly demonstrate that, having proven quite resilient to date, the prime and superprime London residential markets are also now faltering under the influence of the global financial fall out and the weakening housing markets elsewhere in the UK,' said Neil Chegwidden, Director and Head of Residential Research at Jones Lang LaSalle.

'However, the main casualty across all housing markets is a decline activity. This fact is proving problematic for a variety of residential participants as it is difficult to accurately gauge price levels in a thin market,' he added.

'A key factor is that sellers are unwilling to drop their asking prices, especially as very few are forced sellers, while buyers are set on picking up a bargain and a notable price reduction. This stand-off is significantly impeding transactions and transaction levels.'