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Prime London Market Growing at Steady Pace

By +Eric Jafari

London prime propertyFears that property prices in London are growing at an unsustainable rate will be eased somewhat by new figures from Savills, which show steady growth in the prime market. Over the last two and a half years increases of unprecedented levels have been recorded, but growth has been stable. Single-digit annual price rises have once again been recorded - the tenth quarter in a row - marking a period of calm not seen since Savills established their price index in 1979.

For London's prime property market, double digit annual price growth ended across all markets in 2009/2010, once the world's wealthy had transferred assets from stocks and shares into real estate assets. However, demand for prime property in the capital has remained strong, particularly from overseas markets, which now make up 34 per cent of all purchases. As people flock to the city, there has been fear that the sector would overheat, falling prey to the boom and bust environment that characterised the rest of the globe at the turn of the decade. While transactions numbers are still below their long-term average, balanced supply and demand has created a steady market, which continues to be viewed as a safe haven the world over.

Since 2010, average price growth across all prime London has totalled 17.6 per cent - a pleasingly modest figure. While 2012 witnessed a dip in growth, with levels now standing at 4.7 per cent, the first three months of 2013 brought with it further rises. Yolande Barnes, director of Savills World research, commented: "In historic terms, this rate of growth looks steady for a prime residential market and much less volatile than some other prime world markets. It flies in the face of those who claim the market is overheating."

What's more, the market appears to be exceeding expectations, with many predicting that values would flatline in 2013. However, it seems that the prime sector managed to absorb the impact of new taxation policies and continue on its steady rate of growth. The fall in the value of sterling has also helped to attract more and more foreign investors to the country.

03 April 2013

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Prime London Property,Savills,Yolande Barnes