By +Eric Jafari
London emerged as the star of the 2012 residential
property market, achieving pleasing growth throughout the
year. Liam Bailey, global head of Knight Frank Residential
Research, explained that the capital had unsurprisingly
differentiated itself from the rest of the UK.
"As always the average position across the UK has disguised the
performance of different submarkets, and none has been more
different than the central London market, which saw nine per cent
growth in prices in 2012," he said. This has added to recent
growth, taking prices in central London an average of 34 per cent
higher than 2009. Conversely, across the rest of the UK prices have
only increased by one per cent over the same period.
"International demand has helped to propel London prices higher
and has also influenced the prime outer London property
markets, covering Wandsworth to Richmond, and Hampstead and Canary
Wharf - where prices managed to rise by five per cent in 2012
and a respectable 13 per cent over the past three years," Mr Bailey
However, the sustainability of such growth is questionable, with
the turbulent nature of the UK property market as a whole possibly
threatening the capital's performance and tax changes damaging
demand for prime London property. Knight Frank has predicted that
in this segment there will be no price movement, which could impact
upon the Capital's overall transaction totals.
This will be threatened further by the possibility of a
triple-dip recession in the country. According to Grainne Gilmore,
head of UK Residential Research, it is these "unusual economic
conditions, rather than a genuine equilibrium in the market" that
is causing stagnation.
Tighter mortgage lending rules are also putting pressure on the
sector, with transaction levels roughly halving since the market
peak in 2007. Ms Gilmore explained that mortgage levels are still
35 per cent below the 20 year average. "First-time buyers and those
further up the housing ladder struggle with tighter mortgage
lending rules," she added.
17 January 2013
Knight Frank,Liam Bailey,Canary Wharf,Grainne Gilmore,First Time Buyers