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London ‘Millionaire Club’ Areas See Summer Lull Hit Home Prices

London ‘Millionaire Club’ Areas See Summer Lull Hit Home Prices
Rows of houses stand on Lansdowne Road in the Kensington and Chelsea borough of London. Photographer: Chris Ratcliffe/Bloomberg

London home sellers cut asking prices this month, with affluent districts such as Kensington and Chelsea leading the decline during the seasonal summer lull, according to Rightmove Plc.

Prices sought in the capital fell 2.8 percent from July to an average 501,067 pounds ($784,000), the property-website operator said in a report today. In the boroughs of Kensington, Camden and Westminster -- where average values exceed 1 million pounds -- there was a drop of 90,000 pounds.

“A holiday-season price dip is the norm in August,” said Miles Shipside, director at Rightmove. It’s “down-time rather than a downturn. The top-end market remains buoyant, but they’re currently busy bobbing about on their yachts.”

Nationally, values dropped 1.8 percent in August, the first decline this year. Prices are still up 5.5 percent in the past year as measures by the government and the Bank of England to improve credit availability boost demand. Rightmove said more must be done to increase supplies to prevent a property bubble.

The U.K. Treasury’s Help-to-Buy program is already providing loans to consumers for deposits for new-build homes, and a second stage in 2014 will see the government provide guarantees on mortgages for existing homes.

‘Unsustainable Boom’

“The underlying recovery in the housing market continues,” Shipside said. “Demand is already on the up, and that’s before the roll-out of phase two of Help to Buy. It is now critical that the supply of property improves so that the goal of a significant increase in transaction numbers is not overshadowed by an unsustainable boom in property prices.”

The average house price across Britain was 249,199 pounds in August, according to Rightmove. It said that housing supply has increased just 0.2 percent this year.

In London, asking prices in Kensington and Chelsea fell 4.7 percent in August from July. That’s a drop of about 110,000 pounds and takes the average to 2.23 million pounds. The city’s biggest percentage drop on the month was in Camden, down 6.9 percent. Across London, average prices are still up 10 percent in the past year.

Acadametrics Ltd. said on Aug. 9 that home prices in seven of London’s eight most expensive neighborhoods fell in June as the number of properties bought with cash dropped.

Homes in the City of London financial district had the biggest decrease, falling 2.5 percent. That was followed by the City of Westminster, which includes the affluent Mayfair area, where prices fell 2.4 percent.

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