Estate agents are debating among themselves whether it will soon be appropriate to shave 25% or 30% off the values of properties in England from when prices peaked at the end of 2007.
Savills valuation department yesterday admitted that valuers were having a hard time assessing the ‘reality’ of the current market, where there is little transactional evidence; where prices are falling and the market changing almost daily with wave after wave of bad news in the media.
Properties worth over £500,000 – an increasingly hard line to draw as the goalposts move – are said, however, to be ‘holding up better’ but turnover of property sales in England is down by 60%.
So far this year, Savills believe prices to have fallen around 10% but they warn more is to come.
Markets which are most exposed to the fall out from City job losses – Kensington, Notting Hill, the City and Wapping – are particularly vulnerable. In the first half of 2008, the only market bracket to have had stronger turnover than last year was the super prime. In the £20m bracket, ‘both turnover and prices are holding up but it is thinning,’ says Jim Ward, director of residential research.
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‘We are now standing back from saying the recovery will come in 2010,’ he adds. They predict that December 2007 values are unlikely to be seen again until 2012 – 2016.
However, as the glut in the supply of new housing continues, Savills anticipates that the recovery, when it comes, will be swiftly boosted by housing scarcity.