Finance

Finance

Luxury home prices plummet in London

03 February 2009 13:37 (UTC +04:00)

Baku-APA-Economics. London luxury home prices had the second-biggest decline on record in January as would-be buyers struggled to secure mortgages from banks hurt by the global financial crisis, Bloomberg reports.
The average value of homes costing more than 1 million pounds ($1.4 million) in Londonâ€™s most expensive neighborhoods fell 3.7 percent from a month earlier, Knight Frank LLP said in an e-mailed statement Jan. 31. In the past 12 months, prices have slumped 21 percent, the biggest annualized drop recorded by Knight Frank.
The cost of buying a luxury home in the U.K. capital has fallen for 10 straight months, declining 21 percent since the marketâ€™s peak in March. The biggest drop since the broker started the survey in 1976 was 3.9 percent, recorded in October.
The drop in prices has attracted more potential buyers. The fall in the pound against the dollar and the euro is prompting international buyers to look at London properties. Viewing levels last month were 65 percent higher than a year earlier, while the number of international buyers registering with a broker in January was 35 percent more than the year before.
The neighborhoods attracting the biggest increase in interest last month were Mayfair, Knightsbridge, Belgravia and Chelsea, said Knight Frank.
The pound has fallen 28 percent against the dollar in the past year and 14 percent against the euro in the past year.
House prices across the U.K. fell 1.3 percent in January from the previous month and about 17 percent on an annual basis, Nationwide Building Society, the U.K.â€™s largest customer-owned mortgage lender, said Jan. 29. The report covered all types of homes. While the biggest drop in values has been in properties costing as much as 2.5 million pounds, homes costing more than 10 million pounds have lost 20 percent in value since September.