The Central London Housing Market Breaks More Records

How I wish I’d invested in a London property in 1976, a house bought for £100,000 then would today be worth over £4,200,000 according to the latest figures from the Knight Frank Prime Central London Residential Index which reveals that prices of the best properties in central London have risen by over 33.3% in the 12 months to the end of May 2007. Unfortunately, I was just a twinkle in my parent’s eyes and hindsight is a wonderful thing. However the data does indicate that this premier market may well be close to its peak along with the rest of the UK market. Time to buy overseas?

At more than three times the rate seen in the wider UK market, this is the fastest rate of growth since March 1979 showing that central London house prices are on the up. Exceptional properties in the “uber-prime” London property market are now hitting the £3,000 per sq ft barrier – and several properties have broken the £4,000 per sq ft barrier with once again properties in Belgravia and Knightsbridge leading the charge, rising by more than 45% in 12 months.

Monaco is the only place in the world which can now compete with London in world price level rankings. A prime pad in Monaco comes in at around £2,190 per sq ft up against a central London residence where you will be shelling out some £2,300 per sq ft,across the pond, in New York and the heart of Asia Hong Kong and Tokyo comes in as the next most expensive locations a snip at just £1,600, £1,230 and £1,100 per sq ft respectively.

Liam Bailey, Head of Residential Research, comments: “Prices in central London arenow over 33.3% higher than they were a year ago, and in some locations growth is over 45% (Knightsbridge and Belgravia). Houses have again outpaced flats in terms of price performance, reflecting the structural deficit of family accommodation, a national problem which affects London more than any other UK region”

With a shift in the supply and demand ratio points to a move away from a sellers to a buyers market. This is a lead indicator which we think shows we are moving into a slower market - pricing has some way to run and we still think that central London prices for property priced over £3M will grow by 20% in 2007.

What are your views on London property? Too expensive for what you get or is that just the price you have to pay for living in the new capital and financial centre of the world? Have your say below…