prime central London residential property prices on the UP!

Prime central London residential property prices increased by 0.6% in October and have increased by 6.2% over the first ten months of 2013, according to the latest data from Knight Frank.

October’s monthly increase means that London’s best homes have increased in value month-on-month for three consecutive years.

However, in spite of new record prices we are seeing a moderation in price growth across prime central London following very strong performance over recent years.

Annual growth, which currently stands at 6.8%, compared to 10.1% in the 12 months to October 2012 and 12.5% in the year to end October 2011. There are signs that buyers in certain prime central London markets are becoming more resistant to ongoing price growth.

While the general trend was for prices to increase, in two of the markets tracked by the index average prices fell on a monthly basis. In Hyde Park, prime property values declined by 0.3%, while along the South Bank the monthly fall in values was 1.4%. In Belgravia, Chelsea, Kensington and St John’s Wood, prices ended the month unchanged from September.

The biggest increases in property prices in October came from City Fringe, Islington and Marylebone at 3.5%, 1.7% and 1.5% respectively. The number of new applicants registering their interest in buying a home is 34.4% higher so far in 2013 compared to the same period of 2012.

The number of property viewings is also higher over the same period, by almost 15%. Much of this increase in demand is targeted at the sub-£2million market. Sales of sub-£2million properties are 7.6% higher in 2013 to date compared to the same period in 2012, while prices of sub-£2million homes have risen by 9.1% over the first 10 months of 2013.

Comparatively, prices for homes valued between £5million and £10million and £10million+ have increased by 3.8% and 2% in 2013 to date. The higher stamp duty charge for £2million+ properties, introduced at last year’s Budget, remains a key driver behind stronger growth in the sub-£2million market, but the higher level of transactions at this level means stock levels for sub-£2million properties have fallen and are 21.6% lower in October 2013 than in the same month of 2012. –