Central London property prices reached a new high in June, with prices rising 0.8%, according to the latest prime central London index from Knight Frank.
The rise contributed to annual growth of 10.5%, but with values almost 50% higher than they were in March 2009, the rate of price growth is beginning to slow, the report said.
Over the past few years, international buyers have seen London property as a safe-haven investment. Evidence of this is the fact that while European buyers averaged 10% of the £2m plus central London market between 2005 and 2010, the same figure for 2011 and 2012 to date is 20%.
A £1m investment in central London property in March 2009 would now be worth approximately £1.48m. This growth equates to an average monthly appreciation of £12,400, or £407 daily, assuming that the original purchase was made in sterling.
With over 50% of prime central London purchases being made by overseas buyers, the impact of currency exchange rates is a relevant factor for investors, said Knight Frank.
In October 2011, a 5% growth was forecast for prices in 2012. With 5.5% growth already, it is not expected that there will be significant additional uplift during the remainder of the year.
Liam Bailey, head of residential research at Knight Frank, said “We are beginning to see resistance from buyers to ongoing price increases.”
20 July 2012