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Finance & Stock Groups Forum Index » Real Estate » FT: Slump hits London's richest homeowners
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 Posted: Wed Oct 29, 2008 9:02 am |
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Slump hits London's richest homeowners
By Norma Cohen, Economics Correspondent
Financial Times
Published: October 28, 2008 11:57
Homeowners in some of central London’s wealthiest areas are now
feeling the full impact of the property slump, data published by the
Land Registry on Tuesday showed.
In September, house prices in Kensington and Chelsea – which were
rising at an annualised rate of 33.5 per cent a year ago – fell by 2.0
per cent, having fallen by 1.1 per cent the previous month.
Meanwhile, house prices in Islington fell by 1.0 per cent in September
from August, and those in Greenwich dropped by 1.7 per cent. House
prices in the City of Westminster, which includes Mayfair, have fallen
by a more modest 0.8 per cent.
Many of the areas now showing declines are those that have been home
to high-flying financiers whose careers may be in doubt as leading
financial firms cut staff.
Overall, the Land Registry data show, prices of homes in England and
Wales have fallen by 8.0 per cent year on year, losing 2.2 per cent in
value in September alone. August price declines have been revised to
2.3 per cent from the 1.9 per cent reported initially.
The Land Registry said house prices have now wiped out all their gains
since autumn 2006, erasing the equity cushion many had built up and
leaving the Registry’s index closer to that of other closely watched
indices.
Land Registry data are actual transactions that have taken place. They
include all sales, unlike those of the leading lenders, whose universe
is limited to their own borrowers. Because transactions can be
recorded up to three months after the sale, the Registry’s data tend
to lag behind those of lenders.
The data are made available as the Financial Services Authority
published figures showing a 71 per cent increase in the number of home
repossessions by the end of the second quarter of 2008 compared with
the year before.
Although the rise is from a relatively low base, it suggests the
weaker economy is already taking a toll on the ability of homeowners
to service their debts.
More worrying for banks is the fact that sales of repossessed homes
have shown hardly any change, with the volume of unsold stock on
lenders’ books up 70 per cent from that in 2007.
At the same time, arrears cases have been slowly rising and at the end
of June 2008 they were 16 per cent higher than those of the year
before.
As a percentage of UK banks’ loan books, arrears rose to 2.58 per cent
of all mortgages from 2.10 per cent in June 2007.
http://www.ft.com/cms/s/0/ffedd5dc-a4e5-11dd-b4f5-000077b07658.html |
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