The London travelling public’s free morning rag, The Metro, reported today that this month’s nationwide 3.2% drop in house prices was as a result of people trying to get their properties sold before the requirement to provide a Home Information Pack.

Contrary to most so-called experts predictions, London’s drop in prices was a massive 6.8%.

“The substantial drops in asking prices are further confirmation of the underlying trend of more sellers re-adjusting their prices downwards to try and tempt buyers in deteriorating market conditions,” the BBC reports Miles Shipside, the commercial director of Rightmove, as saying.

While it may be the case that HIPs have had some impact, it’s ridiculous to suggest people in London would choose swallow an average £40,000 house price drop just so they could sell their house quickly enough to avoid paying the few hundred pounds for one.

People are constantly telling me that London will be least affected by a house price correction because there will continue to be huge “demand” for housing there. If commentators could be honest for once, they would be reporting that demand has fallen away as a result of a lack of available finance. It is irrelevant that people will continue to need homes in London - that’s only half of the “demand” equation required to support the market. If the finance isn’t available, the market has only one way to go.

This entry was posted on Monday, December 17th, 2007 at 1:23 pm and is filed under Economy, Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.