11 Nov Prime central London property prices still rising, but rate of growth slowing
Prime central London residential property prices increased by 0.6% in October and have increased by 6.2% over the first 10 months of 2013, the latest index shows. October’s monthly increase means that London’s best homes have increased in value month on month for three consecutive years, says the Prime central London sales index from Knight Frank.
The biggest increases in property prices in October came from City Fringe, Islington and Marylebone at 3.5%, 1.7% and 1.5% respectively.
However, in spite of new record prices, there is a moderation in price growth across prime central London following very strong performance over recent years.
Annual growth, which currently stands at 6.8%, compares to 10.1% in the 12 months to October 2012 and 12.5% in the year to the end if October 2011.
While prices have been rising for 35 consecutive months, the rate of annual price growth has slowed. Prices rose 7% in the 12 months to the end of September, compared to 10% in the same period to September 2012.
Prices in prime central London have risen by 5.5% since January, but this headline figure masks variations in performance between individual markets and price brackets.
Property prices in the City and Fringe market have increased by 2.3% on a quarterly basis and by 10.2% in 2013 to date. Similarly, in Islington quarterly price growth of 2.6% has pushed the change in prices in 2013 to 8.9%.
In comparison, property prices in Belgravia fell on a quarterly basis by 0.2% in the third quarter of the year and have grown by only a modest 0.8% over the year to date.
‘There are signs that buyers in certain prime central London markets are becoming more resistant to ongoing price growth,’ said Liam Bailey, global head of residential real estate at Knight Frank.
‘While the general trend was for prices to increase, in two of the markets tracked by our index average prices fell on a monthly basis. In Hyde Park, prime property values declined by 0.3%, while along the South Bank the monthly fall in values was 1.4%,’ he pointed out.
‘Demand for prime central London property remains high, with the number of new applicants registering their interest in buying a home 34.4% higher so far in 2013 compared to the same period of 2012. The number of property viewings is also higher over the same period, by almost 15%,’ he added.
The data also shows that much of this increase in demand is, however, targeted at the sub £2 million market where sales are 7.6% higher in 2013 to date compared to the same period in 2012.
Price growth of sub £2 million homes is outperforming the growth at the top end of the market. Homes in the £5 million to £10 million and £10 million plus price bracket have increased in value by 3.1% and 1.6% respectively in 2013, while homes in the sub £1 million and £1million to £2 million price bracket are higher by 10% and 8.9% respectively.
Bailey added that, unsurprisingly, given the higher level of transaction activity, stock levels across prime central London have fallen. The number of available properties for sale was 8% lower in September 2013 than in September 2012.