Value of Property in London Could Decline
A London property research consultancy has said that if the Euro collapses that the value of prime London properties could be reduced by up to 50%. This seems extreme but then prices have been rising so much in central London areas like St Johns Wood, Kensington, Chelsea, South Kensington, Mayfair and Westminster. However, it could happen, as the average price in these areas has risen by over 30% faster than the rest of the London market since 2007. The average price is now £1.2 million which is almost six times the UK average. In the past few years since the 2008 financial crisis, prime property prices have been rising. Many wealthy European citizens have purchased in London, because they have seen it as a safe haven for their finances, especially Greeks, Spanish and Italian citizens, and it is also an investment because prices keep rising. The increases have been compounded by other wealthy foreigners from Russia, China and India who see London as an ideal base for international business.
Owners of these prime central London properties have in many cases, sold, and made a lot of money and moved to outer boroughs like Battersea and Richmond, which has driven prices higher in these areas as well.
The research reports that if the Euro imploded, sterling would then rise quickly against other currencies as it would be seen as a safe haven. This would result in prime London prices being much more expensive to foreigners compared to cities such as Paris, Rome and Berlin and demand would fall with a possible fall in prices. Many foreigners could also take their profit from selling at this stage, which would soften prices even more.
Is the time to sell now?
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