Luxury London property price rise in September with a year on year increase of 10%
High-end London property prices in September rose at their fastest rate in three months, property firm Knight Frank said today.
According to the “Prime Central London Index” compiled by the London-based firm, the price of the capital’s most expensive properties climbed by an average of 0.7% since August.
Prices in the upper property band have risen by 10% over the last 12 months, Knight Frank said. Knightsbridge, Hyde Park and Marylebone performed the best with an annual growth of more than 14%.
“Average prime property values in central London now stand at a new record high, some 15% above their pre-crisis peak in March 2008,” the report said.
Prices seem to have not been hit by the March 40% increase in stamp duty for top bracket properties and expected changes on tax rates for homes owned by non-residents. However, the reforms have hurt sales volumes in the £2 – £5million band, which decreased by 20 per cent in the last three months, in comparison to the same period last year.
But the drop has been countered by buoying demand in the under £2million tax threshold where sales rose by 23 per cent in the last three months, compared to 2011.
Luxury prices continue to be aided by foreign interest, with foreign nationals – namely Russians, Indians, Italians, US citizens – accounting for just over 40 per cent of London homes, purchased for £1 million or more.
The £2 million plus market is even more dependent and overseas buyers accounting for more than 50 per cent of buyers, Knight Frank said.
According to the firm’s national confidence index published earlier this month, London still fares the best nationally. Following on from positive trends that began in March, 53.4 per cent of Londoners feel that the value of their home increased last month. In East England, where the property price increased for the first time since June 2010, 50.3% of respondents felt that the value of their property was rising.
Nationally the picture is bleaker and the Knight Frank House Price Sentiment Index fell for the 27th consecutive month in September although the “pace of decline has eased markedly.”
Optimism for the coming year, however, is growing. Around 28 per cent believe that their property will rise in value over the next 12 months, while 21 expected it to decline.
The expected 12-month increase still remains still “well below” levels seen earlier in the recovery, Chris Williamson, chief economist at Markit, explained. But, if a rebound in the domestic economy continues this “…could perhaps lead to further gains in the HPSI in the coming months if the news flow continues to improve.”