London's luxury homeowners lower prices so they can sell

The number of failed sales of prime homes has risen by 15% this year and the number of transactions requiring a discount to formalise has almost doubled

GTRES

Editorial Team

4 September 2023, 11:00

Uncertainty, inflation, and rising mortgage rates are taking their toll on the UK residential market. And in the capital, London, it is already causing house prices to fall. Many homeowners are being forced to apply price reductions to close the sale.

In particular, almost double the number of prime housing transactions in July, those worth £5m or more (€5.8m and upwards) saw a discount compared with data from the same period in 2022, according to a LonRes report reported by Bloomberg.

Bloomberg

Similarly, transactions involving prime properties have also fallen by around 25%. Nick Gregori, head of research at LonRes, pointed out that although the volatility of the mortgage sector does not have much impact on this sector, it does affect the insecurity it generates for both buyers and sellers.

The report states that millions of UK homes are losing value due to uncertainty, which is exacerbated by the high cost of living and rising mortgage rates.

He explains that in London, the gap between the economic expectations of sellers and buyers is growing, which has led to many of these transactions not being completed. So far this year, the number of failed transactions in the prime market has increased by nearly 15% compared to the first seven months of 2022, as some sellers are reluctant to lower their property prices. Once again, the figure is at a 10-year high.

Bloomberg

According to Gregori, the year's balance may be better than expected, given that it is slowing down if the economy can normalise. However, if the current market instability is not corrected, he believes it is likely that the number of transactions will not improve. Faced with this situation, the London residential market is expected to come under further pressure.

Article seen on (Bloomberg)

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