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

Hotspot Kensington offers good investment potential

Property prices in Kensington, like much of prime London, are on the up. The foreign demand remains a key driver of price growth, favourable exchange rates mean overseas buyers are benefiting from significant price reductions (17 percent for US Dollar buyers and 16 per cent for Euro buyers) on 2007 pre-crash prices. 

The past decade has seen countless wealthy Russians, Indians and Arabs flocking to buy up swathes of homes in London's most exclusive neighbourhoods. Now the Europeans are following suit.

"While Asian buyers account for the majority of sales of new-build properties in the capital (60% of zone 1 new-build sales in the 6 months to April 2011), European buyers are among those at the forefront of the market for existing homes. In terms of non-UK buyers French buyers account for 6% of the market, Italians 4.5%, Greeks 3.1% and Swiss 2.5%," said Liam Bailey, head of Knight Frank Residential Research.

Whether it is property for sale in Kensington, property for sale in South Kensington or property for sale in North Kensington, homes in each of these affluent areas are in strong demand.

Packed full of different cultural attractions, these areas have a real cosmopolitan feel to them, making them some of the most exciting places to live and work. There is a delightful blend of people residing throughout Kensington, including many different international communities in North Kensington and South Kensington.

These areas are home to some of the most expensive homes in Britain and feature a wide choice of beautiful homes on some of the most attractive residential streets and private roads in London.

The majority of properties in South Kensington, for example, date back to the Victorian era, when there was a boom in new homes, along with the Georgian period. The area is dominated by striking period buildings, including town houses, detached houses, period conversions and mansion blocks. However, there are not many high-rise residential property buildings.

The ever growing shortage of homes in Kensington and its surrounding areas in relation to demand suggests that there has never been a better time for investors looking to buy property in Kensington, North Kensington or South Kensington.

Bailey continues: "Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009."

The latest statistics released by Knight Frank show that average Prime London property prices have risen by 33 per cent since March 2009,

Moving forward, London property prices are expected to continue rising at a relatively rapid rate, which should also benefit markets in other primary locations, including properties in Mayfair, Chelsea and Westminster, among others.

Mark Harris, chief executive of wealth management firm SPF Private Clients, commented: "The forecasts suggest prime central London has still got some way to go with prices - they're expected to rise 30 per cent in the next five years."

Source: Estate Agents - Property for sale in London & Property for sale in Mayfair