Property News Desk
Demand for the best houses in London does not seem to be affected by the economic crisis, as there has been a three-month on month increase with growth of 2.7 per cent, the highest level since July last year. According to the Prime Central London index published by the residential agent Knight Frank, demand for top homes in the capital rose by 0.9 per cent overall in January.
The annual growth in prime house prices has also reached 11.9 per cent, which has increased values by 42 per cent since their post-Lehman Brothers low in March 2009. Areas that have particularly benefited from this increase over the course of 2011 were Chelsea (16.6%), Hyde Park (14%), Kensington (13.9%) and St. John’s Wood (13.35), according to the index.
Liam Bailey, the head of residential research for Knight Frank, showed a positive prediction for this year, looking at the last figures. “As 2012 begins, our view is that the prime central London market will see slower but still positive price growth”, he said in the report.
Figures were positive in terms of new buyers’ applicant volumes, which grew by 10 per cent in last year, compared with the volumes of new homes for sale, which rose by 6 per cent. In this sense, the ratio between the number of buyers registering to purchase homes in Central London and the available offers had risen to hit 4.1 in the past three months. Knight Frank considers that the £5 million plus range, where applications were higher by 65 per cent year-on-year, was the moment with a higher imbalance between offer and demand.
Mr. Bailey pointed out that “the Eurozone crisis, which appeared to reach something of a crescendo in the pre-Christmas period, had little impact on the prime London property market. Ironically, economic and even political turmoil have provided the impetus for growth, with a sharp growth in investors looking for a safe-haven location for at least part of their wealth portfolio”.
In addition, there has been an increase of interest in property purchases from abroad. In a survey carried out by the residential agent between several estate agents, “there was a consensus that buyers from Russia and the former CIS states would become even more important to the London marketplace. Demand from Chinese nationals, which was negligible until 2010 was expected to continue its recent rapid growth, followed by Indian and Middle Eastern demand”, Mr. Bailey added.
According to the report, European buyers have also put their eyes on the central London property market, who describe the importance, value and privacy in an urban environment as the main factors taken in account when they buy a house. In terms of market, “one of the UK’s real attractions for international investors and residents has always been its reputation [London property market] for stability in legal, political and tax affairs”, Mr. Bailey commented.
Reporting by Paula Planelles