Commuter belt property slump as prices are cut by up to £900,000

MIDDLE-CLASS families in London and the South East trying to sell their homes are slashing the prices of properties because of a slump in the market, according to research.

In a trend experts predicted would ripple out across the country, almost half of houses that went up for sale in the capital for between £1 million and £2 million last year had their asking prices cut by about £150,000, with some axed by as much as £900,000.

In comparison, just a quarter of such properties had their prices cut by an average of ten per cent five years ago.

The development follows a plunge in the market value of the most expensive homes in Central London, and comes as a third of sellers across Britain are trimming their prices.

But the research by data firm LonRes suggests that vendors in the middle bracket, whose properties are worth less than the mansions of the super-rich but more than the rest of the country, are now suffering the most.

Experts, who blamed economic uncertainty and rises in stamp duty, said the weakness in the market was spreading to the commuter belt outside the capital, with prices in parts of Surrey and towns such as St Albans beginning to tumble.

But the value of prime property in the North of England and Scotland was still rising.

One commentator said home-owners were often forced to sell because of debt, a death in the family or divorce, but potential buyers were sitting on their hands to see whether prices would plunge further in coming months.

Average house prices in the capital went into reverse last year for the first time since the recession in 2009, with Central London homes falling by 15 per cent, according to the Nationwide building society.