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Luxury London home prices reach record high
Date:-16-Aug-2011
Luxury London home prices reach record high
Luxury residential property prices in central London increased to a record high in June, exceeding the peak reached in March 2008 as a growing number of international purchasers took advantage of a weak UK pound, rising property prices and sought a haven for their wealth, according to a new report from Knight Frank LLP.
The research, which reinforces the fact that London is a solid place to invest in property, reveals that the average price of a luxury home in Central London, in areas such as Belgravia and Holland Park, has appreciated by 34% in the past 27 months, including 8.1% year-on-year growth.
The housing market in the London has recovered well since the credit crisis, buoyed by growing domestic and international demand. Many foreigners view London as the idea destination to protect their assets from political and economic instability in their home countries. This in turns has helped to drive up prices for prime homes in London.
“We are seeing the very wealthy from the world’s trouble spots coming to the UK - they think it’s a no-brainer,” said Charles
McDowell.
But not only is there greater national and international demand to buy property in London, but research shows that demand is also growing for prime properties to rent.
The current Eurozone crisis is having an enormous impact, by driving greater demand for rental homes in Central London, which is helping to push up rental prices and attracting more buy-to-let property investors in the process.
Knight Frank’s London Lettings Index shows that since the beginning of the year, European tenants have secured 30.4% of all new lets, compared to 25% during the same period in 2010.
Excluding very strong year-on-year growth in the number of new French tenants (up 80%), the biggest growth in new tenant volumes came from the so-called PIGS countries: Portugal (up 62% year-on-year), Ireland (76%), Greece (33%) and Spain (73%) pointing to a rise in professionals and high-ranking executives re-locating to London.
Prime central London lettings volumes rose 7% year-on-year in May and rents have risen by nearly 26% since the low point they hit in June 2009, to reach a record high.
Liam Bailey, Knight Frank’s head of residential research, comments: "European demand has been a constant feature of the central London lettings market, with French, Italian and German tenants taking substantial shares of lettings.”
