13 Jan Multi-million pound properties on the up as London prices soar
PROPERTY prices in the capital are booming, and show no sign of slowing as a side effect of economic gloom, two separate studies released this morning have shown. According to LSL Property Services, London house prices are 3.1 per cent higher than last year, bucking the overall downward trend that saw property prices slump 0.5 per cent over 2011, with Wales the only other region showing growth.
London was also a hot spot for ultra-prime property sales, with 9,704 London residential properties on the market for £1m or more during the third quarter of 2011 – a three per cent increase on 2010.
A study by Investec Specialist Private Bank found that the average cost of a multi-million pound house or flat in London is now £2.77m, with 96 properties on the market valued at over £15m.
The LSL study also found nationwide property prices had started to rebound in December, with a modest 0.2 per cent rise month on month.
Richard Sexton, director of e.surv comments: “The final month of 2011 saw a modest rise in prices, which rounded off a year of economic turmoil in which the property market showed remarkable resilience. Despite the growing fears of a debt crisis in the Eurozone, prices rose 0.7% in the second half of 2011 and, with high inflation and reasonably static prices, this has helped make property more and more affordable. While transactions fell slightly in 2011 compared to 2010, the last five months of 2011 all saw higher activity than 2010, boosted by the increasing number of buyers eager to make the most of the affordable – if hard to obtain – mortgage finance coming onto the market.
“But despite prices showing such astonishing staying power, 2012 is set to be another tough year. With the global economy in a parlous state, the size of mortgage advances, which rose in the last 12 months by 3.5%, could begin to decline. The stamp duty holiday for first-time buyers will end in April which means first-time buyers will have to stump up an extra £2,200. This is likely to create a rush in the first part of this year at the lower end of the market as buyers scramble to avoid the purchase tax – after that, we could see first-time buyer activity fall sharply. The government’s mortgage insurance scheme, which aims to boost the supply of mortgage finance to first-time buyers, will provide some help for those trying to get their foot on the ladder, but it’s unlikely it can offset the impact of the end of the tax holiday.”