Prices fall in Irish builders' favoured London district
Investors who bought apartments on the south bank of London's River Thames hoping to flip them for a quick profit face falling values and declining premiums for new homes.
An oversupply of new properties in districts stretching from Tower Bridge to Battersea Bridge produced some of the city's biggest annual price declines in March.
That included a 16pc drop in the SW8 postcode area, containing the Nine Elms district and Battersea Power Station, according to preliminary data from the Land Registry. The area was a big favourite with Irish developers before the crash. Nama initially had vast holdings there and was involved in deals at Nine Elms with Sean Mulryan's Ballymore but they have largely been sold already.
"I expect values to fall further in the Nine Elms area after a huge amount of supply came - and is still coming - at the wrong price," Neal Hudson, founder of research firm Residential Analysts, said.
"Investors have dried up and the bulk of demand for London homes is now from owner-occupiers who can only afford" to pay £450 (€517) per square foot.
The Nine Elms homes are priced between £750 and £1,500 a square foot, he said.
The apartments are often sold with facilities including gyms, swimming pools and 24-hour concierge services.
London's property market has been buffeted by successive tax increases that penalise investors and uncertainty caused by the Brexit vote.
Sales of London luxury homes under construction last year dropped to their lowest since 2012, leaving developers with a record number of unsold properties, according to data compiled by Molior London. (Bloomberg)