Unrestrained growth of prices on the real estate market slowed down

Prices of luxury property in London rose by 1.1% in the second quarter of 2014. Since the beginning of the year prices rose by 4.9% which indicates a significant slowing of price growth, especially compared to 2013, when annual price growth was 11.8%. The real estate market of the London walks to more moderate growth, growth is in line with regional markets that are still recovering from the crisis. And buyers pay attention to the regional real estate market, attracted by the price difference between London and regional prices.

In London the strongest growth in prices was observed in the markets of real estate in the lower price range, in areas such as Islington and Wapping CanaryWharf, which indicates confidence in this sector of the market from employees in the financial sector and investors. Since the beginning of this year property prices in these areas increased by June 2014 to 10.1%, significantly higher than the growth in 2013, which was 13.3% for the entire year.

Sequential change of state fee, as well as the extension of the tax regime had its sobering effect on local buyers and foreign investors.

Another deterrent to market rumors about interest rate rises, which have become more stringent mortgage lending conditions. These sentiments began to influence the market, including the market in the super – luxury segment of the market.

In the upper range of the market улицахMayfair, Knightsbridge, Belgravia and Chelsea, where the average price per square foot is between £2100 and £2400 , ROS price was not more than 1%. In the same areas where the price is around £1600 per square foot, for example, in a fashionable area of Marylebone, the growth of prices amounted to 3.5% for the quarter.

The real estate market in South-West London, where last year was recorded a price increase at 14%, also slowed this year. The price increase since the beginning of the year was 4.4% , and for the last three months the growth of prices was 0.4%.

In the sector of super-expensive real estate more expensive than £10 million saw a decline of prices by 1.5% in the second quarter of 2014. This means that from the beginning of year the rise in prices has made 0%. In fairness it should be noted that the prices of real estate more expensive than £10 million still 48% more expensive than their peaks.

Only real estate cheaper than £2 million has seen a steady increase, which amounted to about 9% yoy.

® Helen Antre 30.06.2014

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