"No property has escaped the falling market, but the best properties have been sheltered by their intrinsic rarity and quality," said Lucian Cook, director of Savills Research.
"In a market where cash remains king these properties are significantly easier to sell. Despite having fallen less sharply than other properties, buyers increasingly recognise their current value compared to peak."
The sharpest falls have been seen in properties priced up to £500,000 and ranked as "blighted" which have now fallen by 29% from peak. By contrast, the best properties in the same price band lost only just over 14% of their value. A similar 15 percentage point class divide is seen between the best and the rest at the top end of the market, where the best properties over £2million have dropped by just 11% and the worst by 26%.
Price falls across the board have been more pronounced in the traditionally more volatile London market. At the lower, sub-£500,000, end of the scale the best have fallen by 21% and the worst in class by 32.5%. In the mid price bands (£500,000 to £1million and £1million to £2million) falls are some six percentage points lower.
"The bottom end of the market has been hit by a lack of mortgage finance, with the mid tier succumbing to the fear of job losses and reduced bonus expectations, particularly in the wake of the collapse of Lehman Brothers which impacted most immediately and significantly on the prime London market.
"Prices in the mid tier are now beginning to show signs of stabilising, particularly in the best prime London locations. We are seeing good quality homes in coveted locations attracting growing interest from cash and equity rich buyers. They are recognising that there is now value in quality, and the ‘best’, if realistically priced, will be the first to buck the trend and show signs of price growth when the market turns."
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