The growth of prices for elite real estate of London exceeded expectations

Prices of luxury property in Central London continued to show growth in August, but there are indications that buyers are becoming more resistant to higher prices, especially on top of the market.

Recent data in the price index for elite real estate of company Knight Frank show that prices of luxury property in London, located in the district’s most prestigious postcodes increased by 0.6% in August and year-by 4.8%.

In the Districts of Marylebone and Notting hull recorded the highest growth in August to 1.5%, and 1%, respectively. In the districts of Islington, city fringe and Hyde Park prices in August rose 0.9% in August.

Despite high prices, the level of interest from potential buyers remains high in the Central part of London. The number of new applications for purchase rose to 33.9% in the year compared to the same period in 2012, and the number of hits increased by 18.5%.

However, the annual growth in property prices in greater London ahead of the price growth for luxury property in Central London, driven by the recovery of the economy and prudent government policy to stimulate the construction industry.

According to the office for National Statistics, prices for luxury properties in greater London increased by 8.1% over the past 12 months, according to the company, prices for luxury property in Central London grew by 7% yoy during the same period. Prices of luxury property in Central London is fuelling most properties costing up to £1 million and range from £1 million to £2.5 million.

Apartments in this range has risen by about 1% in August and 8.7% and 7% respectively for the year. For comparison, the houses and apartments range from £5 million to £10 million. and more expensive than £10 million has risen accordingly from 0 to 0.2% in the month and by 2.6% and 1.6 % respectively for the year.

Key factors for the unprecedented growth in prices began as the reputation of London as a place for safe and secure investments, and the depreciation of the pound. However, even market expert noted that the price growth has exceeded all forecasts and expectations. Last year forecasts concerning the price growth was modest in 2013, analysts believe that in 2013, the market will cease to grow after a continuous increase since 2009. These assumptions were based on the fact that the increase in Stamp duty would deter potential buyers.

However, the weakening of the pound and improving economic indicators have contributed to greater interest from foreign and domestic investors, in addition, a number of government initiatives to stimulate the market, has given a positive tone to all parties involved.

® Alice Morgan 23.08.2013 g.