The price of prime residential property in central London is continuing its upward trend with some areas seeing a 13% rise since March, according to the latest analysis.
The latest Knight Frank Prime Central London Index shows that prime house prices in central London rose 2.1% in October. The annual rate of price change has improved to -3.2% from -8.8% in September although average prices are still 16% below their peak in March 2008.
‘The central London housing market has experienced an extraordinary period in recent weeks. A shortage of property for sale, a weak pound which has encouraged overseas buyers and the return of bonuses to the City all contributed to pushing prices up by the fastest monthly rate of increase since July 2007,’ said Liam Bailey, head of residential research,Knight Frank.
The index shows that prices are now 10% higher than they were at the low reached in March this year and it is UK buyers, particularly those employed in the City, that are boosting the market. UK buyers represented 67% of all buyers in the £5 million plus sector in the three months to the end of October, compared with only 43% in the preceding three months.
Chelsea, Kensington and Notting Hill are leading the charge. In these locations prices have risen by nearly 6% in three months for properties prices at £2 million or more — an increase of almost £1,340 a day’
The reports shows that the strongest performing price bracket continues to be property in the £1million to £2.5 million sector where prices have risen 5.3% in three months. The top price bracket of £10 million plus is less vigorous but has still since a 1.9% price rise in October.
While there was anecdotal evidence of rising stock volumes in September this has failed to continue into October. The number of new properties being brought forward for sale in October was almost 60% below the level seen in October 2008 and 58% lower than September this year.
There is also evidence that Russian and Chinese investors are still keen buyers. In the last month, Knight Frank has handled four £10 million plus sales to UK, Russian and Chinese buyers, including three in Belgravia with asking prices of £16.25 million, £17 million and £32 million and one in Knightsbridge with an asking price of £11.5 million.
Well located properties in sought after areas are still seeing astounding price increases. For example, in Kensington prices for individual properties in Academy Gardens have risen 25% since 2007. A two bedroom flat recently achieved £1,832 per square foot having previously sold in June 2007 for £1,400 per square foot.