By Andrew Batt:
Whilst average U.K. property prices are falling, prime central London property prices continued their rise in October according to the Knight Frank Prime Central London Sales Index.
October saw another month of positive growth in the prime central London residential market, with prices rising a further 0.8 percent. Prices have been climbing on a monthly basis since November 2012 and now stand 52 percent above the post-financial crisis low of March 2009.
The Eurozone crisis has continued to boost demand for prime central London property among international buyers, many of whom are driven by the search for a ‘safe haven’ for their assets.
As noted by Knight Frank in last month’s report, this growth has taken place despite the impact of the U.K. budget’s tax changes. However, the rise in the top rate of stamp duty, the prospect of new rules for an annual charge on properties priced above £2 million (S$3.9 million) held in certain ownership structures and the reform of non-resident capital gains tax rules have had an impact on activity levels in the market.
Knight Frank expects a number of prospective buyers to hold off on making decisions until further clarity regarding the rules is provided. This is expected to come in the Autumn statement on 5 December.
Among the areas performing particularly well in terms of price appreciation is Marylebone, which has seen growth over the past year of 14.5 percent – the highest annual rise of all areas covered by the index.
Other significant increases over the past three months were seen in the City (3.5 percent), Islington (3.4 percent) and Belgravia (3.2 percent). This has been supported by continued demand from buyers for the very best stock.
Analysis from Knight Frank of market activity confirms that average prices have climbed 10.1 percent over the past year, with flats (11.1 percent) outperforming houses (8.4 percent) in terms of growth. Unsurprisingly, given the increase in stamp duty, homes in the sub-£2. 5million (S$4.89 million) price band have seen the strongest price growth both on a yearly and monthly basis.
Prices for prime central London property are expected to end the year up eight percent versus a predicted five percent rise.
Source: http://my.knightfrank.com/research-reports/prime-central-london-sales-index.aspx
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