City job losses and reduced bonuses are expected to contribute to lower house prices in the capital this year, the Centre for Economics and Business Research (CEBR) has predicted, which could lead to more London residents seeking to sell a house quickly as they are made redundant. Although house prices in London have vastly outperformed those in other areas of the country for some time now, the CEBR estimates that house prices will almost stagnate in 2012. City jobs fell by 8.5 per cent in 2011, and this figure is expected to increase this year.
“City traders have tended to put their bonuses into property, either as an investment or via residential,” said Shehan Mohamed, a housing economist at the CEBR. “There is now a dual effect. Bonuses are falling and jobs are going. Obviously job losses are more powerful as they put people in an untenable situation.”
Meanwhile, estate agent Savills said London areas that are traditionally associated with City workers like Clapham, Richmond and Wimbledon saw lower levels of growth in the second half of 2011 as job uncertainties began to bite.