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Prime residential london property prices rise for fifth month in a row

Houses are continuing to outperform flats and the property recovery is being led by Chelsea and Kensington, the latest price index from Knight Frank shows.

In August prices increased by 1% which means that prices are now 6.4% higher than they were in March which was the low point in the recent real estate market cycle.
‘The combination of rising prices and increasing confidence in the central London market has had a dramatic impact on the number of sales which have taken place,’ said Liam Bailey, head of residential research, Knight Frank.

‘Sales volumes are up 90% since January 2008 and represent an incredible 234% increase in sales volumes compared to August last year. Price growth has been driven by the significant bounce in prices in Chelsea, Kensington and St John’s Wood where prices have risen by 5% in the last three months alone,’ he added.

Since the market began improving in April it has been the lower end of the market which has led the recovery, the index shows. Prices in the £1 million to £2.5 million market have risen more than 5% in the last three months compared to only 2.4% for the £10 million plus market.
The research also shows that houses continue to outperform flats with three month
price growth up by 4.6% and 3.6% respectively.

Activity in Chelsea shows how much the market has turned. ‘Over the last two months, we have seen multiple bids on almost every sale we have agreed. Gazumping is back and in some isolated cases, peak prices are being achieved again,’ said James Pace, partner and head of Knight Frank Chelsea.

The office recently sold a property in Redcliffe Road for a record price yet a similar property on the same street sold in December 2008 for 15% lower.
‘Price growth has been focused on quality. Property that is well-presented, in a good location and priced correctly will continue to do well. Property that is compromised will lag behind,’ explained Pace.

The pace of change is also influenced by lack of stock. ‘Our stock levels are 50% lower than what I would expect to have at this time of year. For would-be vendors who have been watching the market, I hope that the buoyant autumn market will motivate
them to sell as the demand is there,’ he added.