Top property prices slashed

SELLERS of upmarket London homes are having to slash the asking-prices on their multi-million pound properties. Those wanting to sell in the most sought-after places in Belgravia, Kensington, Chelsea, Fulham, Mayfair, Hampstead, Putney, Wimbledon and Richmond have lowered their expectations by up to 15% since September.

Some £1m properties have been reduced by £100,000 with £10m homes down by as much as £1.5m.

Aubrey Adams, chief executive of Savills, said: 'Our advice is to ask for a lower sensible price and to make swift decisions about selling. After all, year-on-year prices of these homes are still showing an overall increase.'

The result has been 'greater activity' in London home sales in the last quarter of the year. Homes in the £1m-plus bracket in the Midlands and North appear to be unaffected by the price-cutting as markets have remained strong.

But London's lower-priced housing market has ended the year on a positive note, with prices recovering after last month's sharp decline. A poll of more than 900 London estate agents by property website Hometrack found the average price of a home rose by 0.2% in December, after dropping by 0.5% last month. The number of sales agreed increased 4.4% against 2.7% in November.

But the picture across the capital was again very mixed, with some boroughs, such as Bromley and Havering, enjoying a strong rebound in prices while others, such as the City of London and Newham, saw them continue to fall. For the year, house prices in London have risen by an average of 7%.

Boroughs where prices are below the £200,000 London average generally performed best in 2001 while the capital's more-affluent boroughs experienced more-modest price gains. Waltham Forest, where the average price of a home is £142,300, topped London's house price growth league this year with a gain of 16%. It was followed by the City of London (13.8%), Barking and Dagenham (10.5%), Newham (10.5%) and Hackney (9.6%).

Bottom of the league was Kensington and Chelsea, where prices average £524,400. It has seen values rise by 1.3% over the past 12 months. The performance was almost as poor in Hammersmith and Fulham (1.6%), City of Westminster (1.8%), Richmond (2%) and Wandsworth (2.5%).

Hometrack housing economist John Wriglesworth said: 'After five months where the housing market has notably weakened, our December survey shows a glimmer of hope for the New Year. The fundamentals of rising income, low interest rates and low unemployment give cause for optimism.' Hometrack is sticking with its 4% forecast for London house price rises next year.

Nationwide building society predicted house prices across Britain will increase by 6% in 2002 - half the 12% gain notched up this year. The society's group economist Alex Bannister said: 'Our expectation is that house prices will continue to show reasonable increases in the next few months before the market enters a period of stagnation which could last until the autumn. We would then expect a recovery on the back of improving pay and job prospects.'

Meanwhile, figures from the Building Societies Association reflected the housing market's recent recovery. Home loan advances surged to £693m in November, up from £487m in October and the highest since March. Separate figures from the British Bankers Association showed mortgage demand remains near record levels.