This article of the Property Wire on August 26, 2013 shows that prime
property prices in central London continued to rise in August but there
are indications that buyers are becoming more resistant to continued
price rises, especially at the top of the market.
The latest central London sales index from Knight Frank shows that
property prices in London’s best postcodes increased by 0.6% this month
and so far this year prices have risen by 4.8%.
Marylebone and
Notting Hill recorded the largest rises over the course of the month, up
by 1.5% and 1% respectively. Islington, City Fringe and Hyde Park all
reported price growth of 0.9% in August.
In spite of record
prices, enquiry levels are still robust and interest among prospective
buyers remains high across central London. The number of new applicants
is up by 33.9% over the year to date compared to the same period in 2012
and the number of property viewings conducted over this period is up by
18.5%.
At the same time annual price growth for properties in
Greater London is now outstripping prime central London, boosted by the
city’s continued economic recovery and government policy.
Figures
from the Office of National Statistics show that property prices in
Greater London have risen by 8.1% over the past 12 months. In comparison
the Knight Frank Prime Central London Sales Index is up by 7% on an
annual basis.
Price rises in prime central London are primarily
being driven by homes in the sub £1 million and £1 million to £2.5
million price bracket.
Homes in these price brackets increased by
around 1% in August and are up by 8.7% and 7% respectively over the year
to date. Comparatively, homes in the £5 million to £10 million and the
£10 million plus price brackets increased in value by 0% and 0.2% month
on month and are up by 2.6% and 1.6% respectively so far in 2013.
Knight
Frank says that key factors driving price growth and interest include
the city’s reputation as a safe haven for investment, and the value of
the pound. However the firm’s global head of residential research Liam
Bailey pointed out that performance has outperformed forecasts.
‘Last year, we forecast that prices would remain unchanged in 2013,
marking an end to the strong run the market has seen since early 2009.
Our rationale was that the increase in Stamp Duty would have an impact
on the top end of the market and there would be resistance to price
growth from domestic and international purchasers,’ he explained.
‘In
the event we overstated the negative impact of the 5% to 7% Stamp Duty
rise for £2 million plus properties. The further weakening in sterling
in the first half of the year helped to boost overseas interest and
domestic demand has been aided by London’s continued economic recovery
and, arguably, from the government’s Help to Buy scheme, which was
launched at the end of the first quarter this year and has boosted
sentiment across the market,’ he added.
He also said that while
Help to Buy, with its £600,000 valuation cap is a more significant
factor in the wider mainstream market, rising housing market sentiment,
as reported in the firm’s latest House Price Sentiment Index, is
infectious across markets and price brackets and is likely to act as a
positive influence in terms of future pricing, even in London’s prime
market segments.
‘We have therefore raised our forecast for prime central London price growth for 2013 to 6%,’ he added.
Article Source: http://www.propertywire.com/news/europe/prime-london-property-prices-201308268161.html
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