City high rollers are offloading their property investments as panic selling grips the housing market, according to the latest Asking Price Index Report from Home.co.uk.
Pessimism in the City concerning the property market and the wider UK economy has ramped up the number of premium properties entering the market, particularly in Greater London where a staggering 23% of the current housing stock for sale was rushed to market in the last 14 days.
This new wave of prime property listings has raised the average asking price in Greater London by 3.4% since last month to £361,414.
Doug Shephard from Home.co.uk says a poor economic outlook and high mortgage rates have had a cumulative effect on workers in the financial sector.
Many City workers are now expecting redundancies. A recent report by the International Financial Services London research group suggesting 10,000 City jobs may be lost over the course of 2008 due to the credit crunch.
As with the rest of the country City property investors have also been hit by higher mortgage costs, with mortgage firms tightening lending criteria and the Bank of England keeping interest rates on hold this month.
Shephard says: "They are bracing themselves for a tough year and don't want to risk making painful near-term losses on property. They want out."
He adds that recent government policies such as tightening up tax loopholes for rich non-domiciled foreigners have also had an effect, leading many in the City to believe that "the rich are now less welcome in the UK".
The rise in high-end London properties coming onto the property market has contributed significantly to an increase in the average asking price for England and Wales by 1.4% this month.
However asking price figures for the last three months show prices are still set to tumble during 2008. Asking prices have fallen in seven out of nine regions in England since the start of the year. Only Greater London, which rose by 1.6%, and the North, which rose by 0.3%, bucked the trend.
Prices have also risen slightly in Wales by 0.2% over the last three months, but came down in Scotland by 0.7% over the same period.
The current average asking price in England and Wales now stands at £259,026, down 0.4% since the start of the year.
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