London property prices could continue to soar

There are early indications that the general price of property for sale in London will continue to appreciate throughout the rest of this year.

With property consultants Knight Frank reporting a 20 per cent year-on-year rise in buyer registrations in June, London property prices are continuing to rise, with 34 per cent growth in prices for the capital's best addresses over the past year.

In fact, luxury home prices in central London are now at a record high, thanks mainly to a surge in overseas nationals buying property in the capital.

Greater demand has helped to push up the average price of a luxury home in Central London. This is reflected in the price of property for sale in Kensington and property for sale in Mayfair. This can also be seen in places like Richmond, which provides further evidence that London is a great place to invest for solid capital growth.

The study shows that more foreigners are taking advantage of the weak Sterling and also see London as a safe haven to protect their wealth from political and economic instability in their home countries.

Charles McDowell, a senior sales negotiator at Knight Frank, said: "We are seeing the very wealthy from the world's trouble spots coming to the UK – they think it's a no-brainer."

Leading London based estate agents Marsh & Parsons report that they have an average of 13 buyers registered for each home for sale in London, with this ratio much higher in prime London.

The company recorded its second ever highest monthly tally of property sales in the capital in March of this year, despite the fragile state of the economy, they firmly expect demand to grow further as economic conditions improve, pushing prices higher.

"It's not surprising that London property prices have increased so far this year," said Peter Rollings of Marsh & Parsons. "We have enormous numbers of buyers coming into the market."

With enormous national and international appetite for homes in primarily locations, such as property for sale in Chelsea and property for sale in Fulham, among others, the gap between London property prices and the rest of the UK is widening.

Research from estate agents Savills reveals that the gap between London residential property prices and average values in the rest of England and Wales is at its widest for ten years.

The typical home in London is now worth 113 per cent more than the average in England and Wales, their analysis of Land Registry data shows. This compares to a differential of 73 per cent in 2005/06 and just 47 per cent in 1995.

Consumer confidence in the UK housing market is improving, according to a survey by Building Societies Association (BSA) which shows that a growing number of people are far more positive about the market's future outlook.

But while property prices are generally expected to increase in the long-term, a fragile economy and stringent mortgage lending conditions are restricting property sales activity, currently at a historic low, preventing any significant capital growth, with the exception of London, which is in a league of its own.

Savills anticipate that London property prices will rise by around 30 per cent over the next five years, and very few pundits would disagree.

Source: Marsh & Parsons Estate Agents – Property for Sale in Pimlico, Richmond