Sales volumes on a year-on-year basis rose in April, up 18% compared to April 2009,but fell on a month-on-month basis, by 23% between March and April, as the election began to act as a drag on the market, according to the Knight Frank Prime Central London Residential Index April 2010.
Foreign buyers are driving the market forward with international purchases in the £2 million plus sector now accounting for 56% of all buyers. Greece may be experiencing financial turmoil but more Greeks than ever are buying in London. Demand from purchasers from Greece has risen steeply, with these buyers doubling their market share from 3% to 6% in the £2 million plus sector over the past 12 months, the index shows. Italians account for 13% of the market and Russians 13%.
‘The prime London market recovery has continued into its second year with prices rising continually for 13 straight months,’ said Liam Bailey, head of residential research at Knight Frank.
But while prices have recovered from their low in March last year, the market has been struggling to maintain the growth of volumes experienced through the autumn and the early spring. In April, sales volumes actually dropped 23% from the total recorded in March.
‘Anecdotal evidence suggests that the election has had the impact of slowing purchase interest in the market, and certainly throughout April the market has experienced a more difficult period for agents in trying to get deals to stick together,’ explained Bailey.
‘The real bright spot throughout the market has been international demand. These buyers have been taking an ever larger share of the market following the weakening of the pound. The number and range of nationalities widens every month, with German, Indian, Pakistani and Greek buyers all coming through at the current time,’ he said.
‘Ironically there does seem to have been a positive impact on the London market from the current Eurozone sovereign debt crisis, with European buyers becoming much more active. With the current crisis focused on Greece there has been a direct impact in terms of demand from this source,’ added Bailey.
According to Rupert des Forges, partner at Knight Frank Knightsbridge wealthy Greek families see London property as a safe haven for their money. ‘There has been a real trend for wealthy Greek families to invest in UK property for a variety of reasons but the safe haven driver is a big one.
Over the past two months the demand from all nationalities in central London has risen, but Greek buyers have defiantly been especially active and have been competing hard for the limited number of high quality properties
