The London Daily News

05 January, 2012 11:16 (GMT +00:00)

"No growth" in London's housing market in 2012

Property News Desk

New research is indicating that the effect of more job cuts in the capitals financial services industry, and the decline of city bonuses will adversely affect the housing market with predictions that there will be "no growth" in house prices in 2012.

Shehen Mohamed from the think-tank the Centre for Economics and Business Research said:

"Bonuses are falling and jobs are going. Obviously job losses are more powerful as they put people in an untenable situation. Bonuses tended to be used as a down payment. Less bonuses mean less potential new buyers bidding up each property".

The research carried out by Centre for Economics and Business Research showed that jobs in London's Square Mile, have shrunk by 8.5% and bonuses by 8% in 2010.

Savills the upmarket residential property agent has recorded drops in growth in house prices in areas traditionally where bankers live like, Fulham, Richmond and Wandsworth.

However London property is being buoyed by investors fleeing the Euro zone like Greeks, Spanish and Italians, with agents reporting that buyers are purchasing properties in cash to invest their money in a "safe haven", which is the perception of London housing. Foreign buyers accounted for 55% of purchases in prime central London locations according to Savills.

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