Things are looking good for prime property prices in London. The Primelocation.com February Prime Index heralded a rise in prices in the capital, and now the figures from Knight Frank’s Prime Central London Residential Index are saying the same.
Prime property prices in central London were up 3.2 per cent in February, says the Knight Frank report. Not since August 2007 has such a rise been seen. The gap is closing on pre credit crunch levels, as prices are now just 10 per cent lower than during the market peak of March 2008.
And Knight Frank are seeing more and more cases of houses in the £5 million+ price band now even out-doing those of the March 2008 market peak.
Liam Bailey, head of residential research at Knight Frank, says: “At the very top of the market we have begun to see increasing examples of properties hitting or exceeding peak prices again – the £5m-£10m sector is most effected by this new phenomena especially in Mayfair, Kensington, Holland Park and Knightsbridge where supply of excellent properties is very thin and buyers are increasingly willing to pay figures above guide prices to secure the right house.”
The market was kick-started again when low interest rates and the weak pound began attracting foreign buyers to prime central London in March 2008. The buyers kept coming, with 45 per cent of purchases costing £2 million or more coming from non-UK buyers over the last 12 months.
Demand from Asian investors has risen 120 per cent in the last year. New-build properties along the river and into Canary Wharf have been attracting buyers from Hong Kong, Singapore, Malaysia and Thailand.
And developers in the capital are building again. The rising prices and high demand are drawing niche developers back to Chelsea, Mayfair and Belgravia, after an absence of almost 18 months. There was 43 per cent more construction starting in the borough of Kensington and Chelsea in the second half of 2009.