Biggest victim of housing slowdown will be sellers of £1m homes

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by Kay Murchie

According to Hamptons estate agents, sellers of £1 million homes will suffer during the slump in the UK property market.

Since September 2007, their value has fallen by up to 15%, said Hamptons. In comparison, the average home which typically sold for £200,000 has fallen by around 3%.

Recent figures from the Land Registry has revealed that the number of homes sold for £1 million or more in January was 15% down compared with the same month last year.

The drop was even more severe in London where values were down 24%.

Mark Anderson of Hamptons said the market is in a very different place from this time last year.

Liam Bailey of Knight Frank mirrored the comments of Hamptons and confessed that we are now in the grip of a major housing market slowdown.

Last year, a luxury home took an average of 47 days to sell, it is currently at 76 days, according to Knight Frank.

Savills estate agent agreed and said it had seen prices fall in both London and the countryside, down 1.5% during the first quarter of 2008.

Savills added that the year is challenging and said the current uncertainty was to blame for a sharp fall in the number of homes it is selling in the capital.

Mr Anderson explained that luxury homes are selling, but only if the owner accepts how significantly prices have fallen since last summer.

The problem is that many owners refuse to accept this fact and demand an asking price which they have no hope of getting it, added Mr Anderson.

Kate Moy, an analyst at Numis Securities, warned that the prime property market is set to see continuing falls.

We’re only talking about minor decreases, but I don’t see an end to the attrition of prices for some time, added Ms Moy.

According to business monitor company Debtwire, estate agencies are closing due to the housing slowdown and the number of agencies has dropped from 13,000 to 12,000 already this year.

As a result, 4,000 jobs have been lost. The company said the rate of closures had escalated and is currently 150 each week.

The research shows the impact the worldwide credit squeeze is having on the UK property market and the economy as a whole.