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Prime London prices peaking at spring 2008 levels

Thursday 4th March 2010

By Mike Jones

Prime London residential prices are now reaching spring 2008 levels, according to a number of leading estate agents, with very strong rates of growth being recorded over the last six to eight weeks.

Prices are reported to be back to the sort of growth rates achieved during the property boom in summer 2007.

Prime Purchase said it had seen a significant rise in the prime market of £2million plus properties in central London over the last year and confirmed that estate agency figures - of rises up to 20% over the last year - were, if anything, understated in some highly-sought after areas.

Nathalie Hirst, London Director of Prime Purchase said: "Larger houses of £5million plus in Kensington, Knightsbridge, Belgravia and Mayfair are in some cases now selling at prices above those reached in Spring 2008. The very low interest rates and a weak pound began to attract foreign investors early last year and there has been consistent demand for property over the £5million mark since that time, driven by a perception that prices represent good value. Demand from these mainly foreign buyers has pushed prices upwards."

The prime "mid-market" for £2million to £5million London properties has been led by foreign buyers, who have made up the majority of Prime Purchase clients over the last year, including nationals and expats from SE Asia.

Guy Meacock of Prime Purchase London said: "While demand for London property has increased over the last 12-months, supply has remained poor with about 25% less properties available for viewings than has been usual over the last three years. Consequently areas of South West London, hitherto regarded as outside as secondary locations, have seen considerable buyer activity."

Prime Purchase said while there were concerns about the outcome of the General Election and a rise in interest rates, London would always attract buyer interest becuase of what the capital offered in terms of lifestyle and amenities, as well as the City remaining a financial hub.

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