That story was definitely in the Evening Standard on Tuesday 3 June, I read it on the train on the way home from work but I can't find the story online now for some reason. The gist of it was that an unprecedented number of home sellers are being forced to cut asking prices as the market 'cools down'. Here we go with the soft landing b*llocks.
Overheated home market set to cool in the capital
Jonathan Prynn, Consumer Business Editor
London's “intense” overheated property market is set to cool down this summer as buyers “just say no” to massively inflated prices, one of Britain’s biggest mortage lenders warned today.
Graham Beale, chief executive of the Nationwide, said there were growing signs of a “natural correction” in values — after more than five years of remorseless rises fuelled by an acute shortage of homes and waves of wealthy foreign buyers.
The comments from Britain’s third-biggest home loan provider are the most high profile warning yet that London’s remarkably long-running property boom may be approaching the buffers.
They come after Bank of England Governor Mark Carney said the rampant property market posed the biggest threat to the economic recovery. Official figures show average prices in the capital surged to a record £459,000 — up 17 per cent — in the year to May. But Mr Beale said the London market is now finally starting to cool of its own accord with increasingly nervous buyers starting to walk away from over-ambitious asking prices. “At some point buyers just start saying no,” he said.
Mr Beale told the Standard: “I have been talking to a lot of London estate agents recently. They said that the market at the start of the year had been frenetic but it is now showing signs of plateauing out to be just very busy. A hint of natural correction is going on. It’s very early and I can’t be conclusive at the moment.
“My view is that in London we will see a natural correction through the summer months. The intense heat does seem to be dissipating a bit.”
Although it is highly unlikely that the London property market will suffer a full-blown crash, Mr Beale’s comments will increase expectations that the pace of price hikes will sharply slow down and could even fall slightly.
Agents said a range of factors have led to the cooling in the London property markets and a shift in the balance of power from sellers to buyers.
Growing fears about an interest rate rise later this year have persuaded some potential buyers to hold back rather than take on huge new mortgages.
Meanwhile lenders are under growing pressure from the Bank and the Treasury to rein in “irresponsible” lending. Last week Lloyds Banking Group, owner of the Halifax mortgage brand, said it would cap mortgages of more than £500,000 at four times a borrower’s salary.
At the upper end of the market there are increasing jitters about the risk of a mansion tax on homes worth more than £2 million from an incoming Labour or Liberal-Democrat supported administration after next year’s general election.
Last month the Duke of Westminster’s Grosvenor Estates sold a £240 million portfolio of central London properties in what was seen as another sign that the property market could be close to a peak.
Grosvenor’s chief executive Mark Preston said he had been “concerned about the high level of residential prices for some time”.