Written by by Naina Mishra, CNN London Written by Naina Mishra, CNN London
Real estate prices can create a “metering effect” in which properties are marked up one year and then marked down in the following year as competition heats up, a property consultant has warned.
The phenomenon is present across all London boroughs and homes worth £750,000 to £1.5 million are often sold in the first quarter of the year, explained Marcus Overman, the senior director of commercial real estate and head of buying & selling at Savills in the city.
“It really is about the blurring of data — both the marker and the valuation,” he told CNN Business Traveller in an interview.
Natalie Mahlangu, head of property services at Savills, said homes are marked up by 1.5 to 2% on average over a two-year period to make room for the subsequent listings.
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“A year ago we were selling luxury London homes at prices of between £1.5 and £2 million,” she told CNN Business Traveller in an interview. “Ten years ago they were selling for £300,000 to £500,000. At the same time (people) are now selling homes at £2.5 million because they want to move out of London and buy in what they call the “second city.”
“Now it’s “sources of water,” she said — “and prices will go up and down year on year.”