Thursday, September 8, 2011

London property bubble 'about to burst' (along with the rest of housing and commercial property?)

The London property bubble could be about to burst, with the number of "distressed" sellers in the capital rising for the first time, according to one property company.

PPR Estates said it had seen rising number of inquiries from property owners in London looking for a quick sale below the current market price. It said rising unemployment, an increase in the number of company liquidations and a collapse in buyer interest – particularly in areas hit by the recent riots – were to blame.

Nick Hopkinson, the director of PPR Estates, said that over the past few years there had been a rising number of "distressed" sellers in other parts of the country, but London had appeared to be immune as prices continued to rise.

This has changed though within the past two months, with the company now reporting a jump in the number of inquiries from both residential and commercial property owners in the capital who need to access the equity in their home quickly.

"Two very different property markets have emerged in London and across the rest of the UK in the last year," Mr Hopkinson said. "London has been the one area of the UK to buck the downward house price trend. Prime London prices, limited supply and cash-rich international buyers have masked the real state of the housing market by propping up the national statistics.

"And our company has had relatively few distressed inquiries from London sellers as a result of the unique dynamics in the capital." more