Docklands homes fall by £72,000, but prices elsewhere are on rise

Asking prices for homes around Canary Wharf have plummeted by more than 16 per cent in the last month as the banking crisis continues to hit prices near London's financial centres.

Almost £72,000 was wiped off the average asking price in the area in a matter of weeks.

New figures released today show that the average in Tower Hamlets fell from £448,071 in mid January to £376,103 by the middle of this month.

Experts said the fall was caused by fewer expensive homes coming up for sale in the east London borough.

But sellers in many other parts of London reacted to the economic gloom differently to help push average asking prices higher during the same period.

Kensington and Chelsea saw a sharp rise in the number of people wanting to sell top-end homes. The average asking price in the west London borough was up by more than £200,000 in February to nearly £2million - a rise of almost 12 per cent.

In Richmond-upon-Thames it rose by nearly six per cent (£30,000) from £517,661 to £547,911.

Average asking prices rose in 18 London boroughs, fell in 14 and stayed the same in Brent.

Across London as a whole asking prices were almost unchanged over the month, in spite of sale prices falling sharply, the figures from property website Rightmove showed.

But there were massive local variations, reflecting the differing fortunes of owners in different parts of the capital.

A spokesman for property search website Rightmove said: "The London picture has been distorted in recent months by a dramatic shift in the mix of property coming to market, indicating external influences are forcing some sellers to act differently.

"In Canary Wharf, the number of properties marketed above the average price in the last month has decreased.

With the area being recently developed and greatly dependent on the health of the financial services sector, it will be prone to more volatility."

He continued: "In January we saw a large increase in average asking prices, with over double the number of £750,000 to £1million properties coming to the market compared with the end of 2008. These sellers were forced to market quickly after the turmoil affecting some City institutions in the autumn.

"Now the number of properties above £750,000 has dropped substantially, to be replaced by lower value properties as the impact of the downturn forces sales further down the ladder."

The opposite has happened in Kensington and Chelsea, though the troubles of the City are the common cause.

There has been an unseasonal surge in properties in excess of £5million pounds coming onto the market in the last month.

Inquiries to Rightmove have doubled since last year, showing growing interest by buyers keen to spot bargains

Director Miles Shipside said: "This is a new record for us and indicates a pent-up demand. Buying opportunities on the way to the bottom of the market are traditionally more plentiful than those on the way up, and sellers are more open to low offers.

"Agents are reporting greater activity, though prospective buyers are being cautious."