Property in prime areas of London is selling for an average of 9.1 per cent lower than the asking price, as discerning buyers prompt sellers to make bigger discounts.
Figures released today by property data tracker LonRes showed that 45 per cent of properties were reduced in price before sale in the first quarter of this year.
The flurry of discounting coincided with a year-on-year drop of 26 per cent in the number of properties sold last quarter. Higher rates of stamp duty and the levy on second homes caused the slowdown as buyers became more wary with their purchases affecting house prices.
But it was not just buyers who were shaken by the market conditions. The number of properties withdrawn from the market was up 15 per cent as some vendors decide not to move rather than accept a lower than desired price. A survey of estate agents found that 72 per cent reported failure to achieve required price as the main reason sellers removed their properties from the market.
In terms of new builds, housebuilding in London reached an 80 year high but Katy Warrick, head of London residential research at Savills warned that this is set to decline.
She said: “We expect volumes to peak this year and fall over the next five years in response to falling sales. And by 2021, we forecast that just 34,700 new homes in the year will be built in London, little more than half the 64,000 new homes we think London really needs annually to meet demand from a strong economy and growing workforce.”