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London luxury property prices to rise 8% in 2011

by: IFAonline
  • 28/06/2011
  • 0
Central London luxury home prices will rise 8% this year as overseas buyers take advantage of a weak pound, broker Savills said.

The average price of a £3m home in areas such as Knightsbridge and Belgravia rose 9.6% in the second quarter from a year earlier, according to the company. The quarterly gain was 3.4%.

“Overseas demand has been much stronger than we expected,” Lucian Cook, a researcher at Savills, told Bloomberg.

“The big unknown is what happens in Greece – will it be a catalyst for more demand because of the outlook for the euro region?”

Buyers based outside the UK have been competing over a below-average number of properties for sale in central London as they seek a haven for their wealth amid political and economic uncertainty at home.

The pound’s 25% slide against a basket of other currencies since the housing market peak in late 2007 has made London property more attractive.

In November, Savills forecast a 1% decline for luxury apartments and houses in central London, predicted a pick-up in the number of properties for sale and said deteriorating economic conditions would deter British buyers.

Overseas buyers accounted for 72% of prime central London property purchases in the first quarter, compared with 60% three years earlier, according to Hamptons International.

Savills predicts average values of prime residential real estate outside London will fall by 3% this year. In November it predicted a 1% drop.

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