How The Euro Crisis Could Halve London’s Prime Property Prices.

The richest parts of London could see property prices plummet if the eurozone collapses predicts a City consultancy firm. The firm, Fathom’s, have conducted research, which suggests that due to the possibly imploding of the single currency the Pound would rise sharply against the other European currencies on the foreign exchange markets and therefore London property prices will become much too expensive. The Pound is already at a two year high against the euro. This suggests that over the next five years those investors who have seen London as a safe haven to invest their money into property could gradually disappear, even though they have been snapping up prime London property for the last decade. These investors now believe that they could purchase similar grand houses in many other European cities for a fraction of the price. Consultants believe that if the Euro did collapse then it could result in an astonishing 50% drop in the value of some of the most prime central London property prices. So over the last two years the property prices in these areas have reaped the benefits of the euro debt crisis as foreign investors have plunged their money into the safe haven property sector in London, however could also mean that if this single currency does flounder then it will also be the biggest threat to the prime real estate of London too. The areas that are highlighted as being potential targets for the slump are St John’s Wood, Chelsea, Kensington, South Kensington, Belgravia, Notting Hill, Mayfair and Westminster. These areas have seen a 30% faster rise in their property prices than other parts of London because foreign investors are keen to buy up property here. The average asking price for property in these areas is £1.2million, which is six times higher than the national average. These same foreign investors would also see their resources drop if the eurozone did collapse, as this would affect the stock markets, therefore property deals would most certainly become fewer. Many investors saw London real estate as a safe haven compared to other Euorpean countries such as Spain and Greece and so bought lots of assets here. They were skeptical about the euro and did not know whether it would succeed and so invested in the capital, therefore pushing the property prices up. Other parts of the UK saw house prices stabilise in May but this could change if the eurozone crisis continues. Many mortgage lenders would be less likely to offer forebearance to those homeowners who have non-performing mortgages and therefore this will mean that house prices will slide once again. Prime London areas have seen investment from all four corners of the globe. Surprisingly the average spend for North Africa investors is £4million while South Africa investors spend on average £2.8million on property in the capital’s prime areas. North Americans spend on average £2.5million when buying a home here and the Italians spend £3.4million. However it is the Russians who invest the most into our prime real estate areas spending on average an astonishing £6.2million per property in the prime areas. Therefore if these foreign investors did decide to invest elsewhere then the slump in the prime areas would most certainly take effect.rnhttp://www.buildingplotsforsale.org