High end homes are the latest to be affected by the housing downturn.
The general property downturn in the UK has begun to affect high-end homes, a new study suggests.
So-called "prime" homes in the nation's most expensive residential district, central London, fell in value by 1.5 per cent last month according to analysis from estate agent Knight Frank. This in turn has dragged the annual rise in prices for the sector to 12.8 per cent: a high figure in comparison with the negative growth currently affecting the average UK property, but well down on last August's inflation rate of 38 per cent.
Prime property has previously borne up well in the credit crunch-induced downturn, due in part to very strong demand for limited stock. However, it now appears that some of the lending trends which have put downwards pressure on house prices elsewhere in the market - such as mortgage firms withdrawing loan deals and raising rates - are now being seen for high end homes.
Liam Bailey at Knight Frank commented: "Up until April, London appeared to have escaped the worst effects of the credit crunch, but with the mortgage market in growing difficulties, the weakness seen across the wider UK market is now spreading to the prime London market."
According to latest figures from Halifax, UK house prices dropped by 2.4 per cent overall last month: taking off £5,000 for every home in the country.
