The sector leading price growth at the current time is the £1m-£2.5m segment.
London, England (PRWEB UK) 6 February 2012
The price of Prime Central London property rose overall by 0.9% in January, according to upmarket estate agents Knight Frank.
Prices for prime property in the City and City Fringe areas also rose by an average of 0.8% across the month.
This latest rise pushed the three-month rate of growth to 2.7%, the highest rate since July 2011 with annual growth now standing at 11.9% and prime London property prices rising 42% since their post-Lehman low in March 2009.
Liam Bailey, Knight Frank's head of residential research, comments: "The strength of London's luxury sector, against a backdrop of economic difficulties both domestically and globally, has surprised many over the past year.
"Ironically economic and even political turmoil have provided the impetus for growth - with a sharp growth in investors looking for a safe-haven location for at least part of their wealth portfolio.
"The sector leading price growth at the current time is the £1m-£2.5m segment, which provides a perfect investment lot size for investors, prices in this price range have risen 14.4% over the past 12 months.
"Recent price growth reflects healthy growth in demand, new applicant volumes are up by 10% over the past year, compared to stock volumes which have risen by only 6%.
"The imbalance in supply and demand is most pronounced in the £5m+ sector, where applicant registrations are higher by 65% year-on-year.
"Over the past five years the ratio between the number of applicants registering to purchase properties in central London, and the stock of properties to buy has averaged 3.7. In the last three months, despite a weaker economic environment the ratio rose to hit 4.1.
"For the £5m market the ratio shifted from a historic position of 3.4 buyers per property to 6.4 - reflecting the historic undersupply at the upper end of the market.
"Our outlook remains that prices will rise 5% in 2012, driven in large part by international demand and relatively constrained supply.
“Finally, prices for prime property in the City and Fringe, an area we added to our index last year, kept pace with the wider PCL market in January, rising by an average of 0.8% across the month.”
Charlie Hart, head of the Knight Frank City & East team, comments, “We expect the earning power of the traditional local demographic to grow with the continuing success of the London tech and creative industries which have traditionally populated this Fringe area. The scarcity of product will drive demand and therefore pricing for the foreseeable future, enabling the City and City Fringe to sustain prime central London pricing levels.”
For further information, please contact:
Liam Bailey, head of Residential Research, Knight Frank, +44 (0)7919 303 148, liam.bailey(at)knightfrank(dot)com
Daisy Ziegler, London PR manager, Knight Frank, +44 (0)20 7861 1031, daisy.ziegler(at)knightfrank(dot)com
Notes to Editors
© Knight Frank LLP 2012 - This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by Knight Frank Residential Research or Knight Frank LLP for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank Residential Research. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Registered office: 55 Baker Street, London, W1U 8A
The Knight Frank Prime Central London Index, established in 1976, is the longest running and most comprehensive index covering the prime central London residential marketplace. The index is based on a repeat valuation methodology that tracks capital values of prime central London residential property. 'Prime central London' is defined in the index as covering: Belgravia, Chelsea, Hyde Park, Kensington, Knightsbridge, Marylebone, Mayfair, Notting Hill, Hyde Park, Riverside*, The City and Fringe and St John’s Wood. 'Prime London' comprises all areas in prime central London, and in addition Canary Wharf, Fulham, Hampstead, Richmond, Wandsworth, Wapping and Wimbledon. * Riverside covers the Thames riverfront from Battersea Bridge in the west running east to encompass London’s South Bank
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 242 offices, in 43 countries, across six continents. More than 7,067 professionals handle in excess of US$817 billion (£498 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit http://www.knightfrank.com.