House prices in London's most expensive areas fall 17 per cent

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The Independent Online

Homeowners in the wealthiest parts of London have seen as much as £100,000 wiped off their value of their property over the past year, a survey shows today.

Homeowners in the wealthiest parts of London have seen as much as £100,000 wiped off their value of their property over the past year, a survey shows today.

The value of the average home in Westminster has tumbled from £611,265 in August 2002 to £506,013, a drop of 17.2 per cent, the property website Rightmove says. Camden, which includes the leafy suburb of Hampstead, suffered a 16.3 per cent tumble over the past year, with the average value falling by £70,844 to £363,965.

Rightmove's figures came as a separate survey showed that confidence in the housing market has halted after three months of increases following the end of the war in Iraq.

The figures are the latest evidence of the impact that the downturn in global financial markets had on the luxury end of the property market.

Redundancies among the workforces of banks in the City of London combined with lower bonus payments for those who are left has undercut a key source of demand for the capital's priciest properties.

But the impact was more than offset by equivalent rises in more outlying areas of the capital. Prices in Newham in east London are up almost 20 per cent on the year and are up 14 per cent in its neighbour Barking and Dagenham, while on the other side of the capital Ealing has risen 11 per cent and Hillingdon 12 per cent.

Overall prices in London are up by 3.2 per cent on the year, according to Rightmove's survey of asking prices in estate agents' windows.

This is a quarter of the nationwide rise of 12.4 per cent and was the slowest growth rate for any region. Growth was driven by rises of more than 20 per cent in the North of England, Wales, Yorkshire, the North-west and the West Midlands. Nationally prices failed to show any rise in July and the annual rate of growth has tumbled from 26.5 per cent in January.

But Rightmove said there had been a recent surge in activity with demand exceeding supply, which should feed through to rising prices. Miles Shipside, its commercial director, said: "At the moment, it's volume take-off rather than price take-off, but over time this could feed through into higher prices as activity grows - particularly as over the past month we saw 22,000 more properties coming off the market than coming on."

However Woolwich, Barclays' mortgage arm, said the boost in optimism that has been evident in the UK housing market over the past three months looks to be easing. Andy Gray, its head of mortgages, said: "The 'confidence bubble' we have seen over recent months may have come to an end. As buyers ponder higher personal debt and lower household earnings, house-price inflation may be cooling off."

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