Knight Frank’s Prime Central London Index for June 2011 indicates that house prices in this part of the capital have risen 34% since March 2009 and are set to climb further.
According to the index, prices of prime London property rose 0.9% in June 2011, contributing to annual growth of 8.3%. They have increased by 34% since their post-credit-crunch low in March 2009, and are now at a record high, 2% up on their previous peak in March 2008. Demand is holding steady as new supply looks set to surge.
Knight Frank predicts that prices will continue to increase, albeit at a slower pace, in the second half of 2011. It has revised its forecast for growth from 3% to 9% this year.
Liam Bailey, head of Knight Frank Residential Research, comments, “Price growth in the prime central London market continued through June, with a further 0.9% rise in prices. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009 and are now 2% higher than at their previous peak in March 2008.
“Looking behind the headline numbers for price growth, activity measures are pointing to continued strong conditions in the central London market over the next few months.
“While the number of exchanges fell year on year in June by 9%, this was not unexpected, bearing in mind the surge of sales prior to 6 April, as buyers tried to complete their sale under the old 4% £1m+ stamp duty rate rather than the new 5% rate.
“More tellingly, there appears to be a new wave of sales coming through, with the volume of properties going under offer [sold subject to contract] rising by 52% year on year in June.
“On the demand side, the number of new buyer registrations has held steady (up slightly by 0.4% this June compared with June 2010), although viewings volumes were up 8% over the same period.
“If demand has risen marginally, supply has risen more rapidly – much to the relief of buyers, who have faced thin choice in the market for the last 18 months. Stock volumes have risen 12% in the year to June, but there is more in the pipeline – with the numbers of new instructions rising 55% in June compared with last June.”
