UK Property - First evidence of prime market resilience following the credit crunch
The Knight Frank Prime Central London index reveals that the uncertainty in the financial markets during August has had limited immediate impact on the prime central London residential market.
The monthly rate of growth fell from 3.9% in July to a still respectable 2.1% in August, whilst the annual rate of growth rose again in August to 37.9%, from 36.4% in July.
Our forecast is that price growth in prime central London will cool from the current 36% annualised rate, to hit 30% by the year end, close to the 29% recorded for the year to December 2006.
Despite the financial market problems over the summer, we remain positive in our outlook and expect to see growth next year in central London hitting double digit levels (although only just). We anticipate that the price of prime property in central London will rise by 10% through 2008. Growth will be led by the super prime market (£5 million+) and by the sub £1 million market, where there is a degree of “catch up” beginning to take place.
Price growth has been led by houses rather than flats over the past year, however August saw a reversal with price growth recorded at 2.3% and 1.9% for flats and houses respectively.
Growth over the last six months within central London has been highest in SW10, this area recorded average monthly growth of 4.1% over the period. W1 followed closely behind with 3.9%, and W14 recorded 3.8% growth per month over the same period.
Courtesy: Knight Frank Residential Research