Ouch. The fall in residential real estate prices was more dramatic in London than in the rest of the UK, but no matter how you look at it, the market has gone down a notch, and this move has all the appearances of being the beginning of a trend.
Although it is a completely unrelated data point, my sources tell me that home sales came to a screeching halt in Poland in August, and that market had also shown strong price appreciation in recent years.
London led the biggest drop in U.K. home values for at least five years this month as higher mortgage costs and the prospect of further declines in prices kept away buyers, a report by Rightmove Plc showed.
The average U.K. asking price fell 3.2 percent to 232,396 pounds ($473,437) from November, the largest decline since the survey of real-estate agents’ listings began in 2002, Britain’s most-used property Web site said today. London home costs dropped 6.8 percent, also the most recorded by Rightmove….
Prices in the London region fell an average of 28,099 pounds on the month and all 32 areas of the capital in the survey had declines, led by the districts of Hackney, Tower Hamlets and Islington, Rightmove said. Home costs in Kensington and Chelsea, where Russian billionaire Roman Abramovich lives, fell 4.9 percent to 1.65 million pounds….
“The market is obviously on the turn,” said Jonathan Slater, a chartered surveyor at Foster Slater in central London. “A lot of people are waiting to get through Christmas. There’s a lot of bated breath and nobody quite knows what’s next.”….
Britons, whose debt totals 1.4 trillion pounds, face higher loan costs after contagion from the U.S. subprime-mortgage collapse froze lending between banks. The average rate offered by lenders on a mortgage for 95 percent of the price of a property, fixed for 24 months, increased to 6.44 percent from 6.42 percent in October, the Bank of England said Dec. 11