London Luxury House Prices Plunge Most Since Financial Crisis

(Bloomberg) -- Home prices in London’s wealthiest districts fell the most since the global financial crisis in April as sellers agreed to wider discounts to secure deals.

Knight Frank’s Prime Central London Index declined 2.1% in the first full month of the U.K.’s coronavirus lockdown, the most since January 2009. A further 1.4% decline in May means prices are now down just over 5% in the past year, the broker’s data show.

“It feels remarkably similar to the period that followed the EU referendum,” said Tom Bill, head of London residential research at Knight Frank. “There is a mix of opportunistic bids that are unlikely to be accepted, bids agreed at a reasonable discount and many cases where the asking price is right and the guide price is met or exceeded after competitive bidding.”

The pandemic has derailed a nascent recovery in London’s priciest postcodes, which showed tentative signs of growth after the U.K.’s December general election. Measures to prevent the spread of the virus hampered sales efforts while the economic turmoil has weighed on buyers’ sentiment.

Still, there are signs the rate of decline may be slowing after the government eased some measures that allowed the housing market to effectively re-open on May 13. The average discount to asking prices for sales in London is now 5.5%, down from 6.4% while the stricter measures were still in place, Knight Frank’s data show.

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