War fears hit prices

A fall in house prices at the top end of London's property market has filtered down to mid-priced homes, a new report has revealed.

The Royal Institute of Chartered Surveyors (RICS) said prices had fallen in the past three months and 45 per cent more surveyors had reported a drop rather than a rise.

Fears over the economy and war with Iraq have meant many homes worth £1 million or more are having to cut asking prices because buyers are being more cautious.

Now economists at RICS say there is strong evidence to suggest the same problem is affecting lowerpriced properties in the capital.

Buyers looking for bargains but unwilling to commit are increasingly finding sellers reluctant to sell below the asking price while they wait for the market to steady.

Cluttons' Westminster office said that while there was a regular number of viewings and offers, it was mostly at under £500,000, with similar news in Holland Park. "Offers are 10 per cent below the asking price and numbers are considerably lower than last year," it said.

In Fulham, sales were five to 15 per cent below last summer's levels, according to John D Wood. Friend & Falcke agreed: "It's impossible to predict the spring market. The public's view is that prices will drop."

The Docklands is hit by both factors. "Lack of job security in the City is causing buyers to think twice and the threat of war is having an indirect effect as people lose money on investments," said Knight Frank's Wapping office.

In Croydon, the market is stable but "could tip either way depending on the Iraq situation and interest rates", said agents Connell.

Only the bottom end of the market in the cheapest locations seems immune. Strettons in Waltham Forest said there was good demand from first-time buyers.