London property prices
As with all property slumps there will be some areas worse hit than others, inflated prices in the capital seeing modest flats changing hands for millions, will hit London property prices hardest. The HBOS predicted that prices in London will fall by a massive 9%, the lender is planning a rights issue in the months to come, hoping to raise £4 billion to counteract falling sales of mortgage plans.
London was of course hardest hit in the 1980s when inflated prices caused negative equity for many.
The Council Of Mortgage Lenders last year predicted a 1% increase in average property prices and are now predicting a 7% drop in prices. Conservative estimates predict a 5-10% drop with the higest estimates reaching 20% for extreme cases!
Some thing to think on is that although property prices are on average 4% down on 2007 they are in fact 5% up on 2006 which, I think puts things in perspective! Prices are not rising as high as they were but have reached a ceiling where steady rises will apply.
The average property price is a huge 39% higher than in 2003, which tells its own tale!!! You could also consider the fact that if you buck the trend and move homne you will be losing a one end (selling) and gaining at another end (buying cheaper) so overall wont lose out too much…