House price data out today shows certain areas of London seeing a large fall in annual house prices with Greenwich borough reaching a 10.7 per cent decline.
That wipes off £55,000 of the annual sold price in 12 months from £515,000 to £460,000.
The monthly fall were 1.6 per cent. Neighbouring Bexley was down 3.5 per cent on the year.
What could have caused Greenwich borough to see the second biggest fall of 33 London authorities (including the City of London)?
Clearly increased mortgage rates will play a part. As people cannot afford to buy, sellers need to reduce prices from recent highs. Figures can also fluctuate somewhat by the month, though there are wider issues at play.
Greenwich has seen many new build homes and in particular leasehold flats constructed in the past decade. With various issues including flammable cladding, selling a new build flat is not easy.
Leasehold reform was also mentioned by the Tories as part of housing reform, though they now seem to be rowing back after industry lobbying leaving residents in the lurch.
There’s also the legacy of “Help to Buy” which in effect acted as “Help for Sellers” and in particular housing developers pushing up prices beyond what would otherwise be expected.
Developers would whack on a price premium and saw profit margins greatly increase after Help to Buy came along. But when people who bought at elevated prices come to sell, who is paying the premium?
New builds are also often tied into energy networks that have seen substantial price increases above and beyond wider rises. Service charges have also often shot up way above inflation. It often appears a wild west with little protection for those living in new developments.
In an area like Greenwich with many new build flats, that could well be a factor in these substantial price falls above and beyond wider drops in the country.
Across the UK prices also fell again, and last month dropped by 0.3 per cent on the year.