The London prime market is leaving the rest of the UK behind as prices for the capital’s most expensive properties have increased 10% over the past year, according to the latest figures from property website PrimeLocation.
For the first time in the index’s history, asking prices rose in every single London borough in November with Camden and Hammersmith and Fulham leading the way with increases of 6.8% and 5.5% respectively.
Despite falling prices in six UK regions, exceptional performance in the capital brought the national average prime price to a new record height for the seventh consecutive month. The average price of a UK prime property is now £475,957, some 0.2% higher than in October, but this performance was not mirrored by the general UK market, where property prices fell 0.2% in November.
‘It is no surprise to see that London’s top properties are the most desirable in the country – prime homes in the capital are almost a law unto themselves, defying the current economic climate which is driven in part by cash injections from wealthy overseas buyers,’ said Nigel Lewis, property analyst at PrimeLocation.
‘No property market is invincible, but it’s likely that the capital’s prime market will continue to outperform the rest of the UK by quite some distance in the coming months and continue the steady growth seen for the most part of 2011, which against a backdrop of great uncertainty has been very encouraging,’ he added.
Just a few days ago the latest research from Savills also showed that prime residential property values across the whole of London have ended 2011 on a record high.
It said that a ‘flight to quality’ by international safe haven buyers means the best central addresses have significantly outperformed, but locations fuelled only by domestic buyers have begun to lose momentum.
Prime central London values rose by 1.1% in the final quarter of the year, taking total growth in 2011 to 14.1%. This compares to annual growth of just 7.2% in 2010, and is up from the 13.6% recorded in the 12 months to the end of September 2011.
Houses have continued to outperform flats across prime central London, with values up 15.7% in 2011 compared to 13.3% for flats.
‘This 2011 growth was unexpected at this time last year and has been almost entirely fuelled in the second half of the year by a massive injection of overseas cash by foreign buyers,’ said Yolande Barnes, director of Savills research.
Demand has come from across the world, with international buyers accounting for around 55% of prime central London sales, up from 52% in 2010. Global unrest and economic uncertainty has impacted, with the European buyer share of the market rising from 13.2% of sales in 2010 to 19.5%, and Middle Eastern buyers from 7.6% to 8.5%.
