The top end of the London housing market continued to be pummelled in July as uncertainty put off both buyers and sellers, a survey of estate agents has suggested.
The number of estate agents saying prices in zones one and two of the capital were falling, rather than rising, rose to 48 per cent in the July, from 45 per cent, the survey, by the Royal Institution of Chartered Surveyors (RICS), showed.
Some 68 per cent of respondents said the sales prices agreed on homes valued at over £1m were below asking price, with 33 per cent saying the amounts agreed were up to five per cent below what had been asked, while 26 per cent said the difference was between five and 10 per cent.
The results also indicated sales are likely to remain muted: net balance readings for buyer enquiries and agreed sales remained negative, at minus nine per cent and minus 13 per cent respectively.
It was a similar picture for the capital's rental market, where tenant demand fell, while nine per cent of respondents reported an increase in landlord instructions. The survey suggested rents in the capital will continue to decline.
“Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come," said Simon Rubinsohn, chief economist at the RICS.
"One reason for this is the recent series of tax changes but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market. And there are some very real consequences for the economy from all of this including the impact on the ability of people to be mobile when looking for work."
The figures support research published yesterday, which showed sellers of the UK's most exclusive homes have knocked an average of £300,000 off their asking prices in an effort to entice buyers.
Meanwhile, estate agents are being hit by the sluggish market, with figures published last week suggesting one in five high street estate agents are at risk of going out of business.