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...
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