Londoners to rethink buying as capital prices join national downward trend

08 2008
Prospective first-time buyers in London and likely to take a step back and consider the benefits of renting for a little longer now that it has been revealed that property prices in the capital are no longer defying the UK-wide downturn.

According to new figures from estate agents Knight Frank, the average London property lost 3.1 per cent of its value in the last three months alone

This was caused largely by the 1.7 per cent reversal seen in June as well as the average decline of 1.5 per cent recorded in May.

Commenting on these latest statistics, Liam Bailey, head of residential research at Knight Frank, said: "The fall in prices that began in May has intensified during June, demonstrating that there can be no doubt that even property in prime Central London has been hit by the double whammy of the credit crunch and wider concerns over the global economy."

At the same time, the Bank of England has reported that mortgage lending has fallen considerably over the past year, due to lenders getting stricter on who they will give money to as well as the fact that many people who would otherwise be purchasing their own home are now staying in the rental sector while they see just how far the market correction will go.
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