Property prices in prime central London rose again in January

Property prices in prime central London rose again in January, to deliver a record 39 months of consecutive growth.

Prices rose 0.4% in January and 7.8% over 12 months, according to the latest Knight Frank Prime Central London Index.

The index has now risen 135% since the index was launched on a monthly basis 10 years ago.

House price growth may be slowing in prime central London but a recent jump in transactions suggests its appeal is widening beyond a ‘safe haven’ investment, said Tom Bill, associate at Knight Frank Residential Research.

Despite strong recent growth, the London property market is growing at a slower pace than in the run-up to the financial crisis.

Prices grew 86% in the buoyant years between the start of 2004 and the pre-crash peak in March 2008.

That is higher than the 65% rise since the post-Lehman Brothers low in March 2009, when London property gained its status as a defensive investment.

The number of overseas buyers in the capital is falling, Bill said. “Growth in the number of UK-domiciled buyers underlines how prime central London was less reliant on overseas capital flight in 2013.

“They accounted for 74% of deals last year compared to 68% in 2011.

“At the same time the number of European buyers fell from 16% to 11%, and there were no Greek-domiciled buyers in 2013 for the first time in four years.”

In 2004, £1 million would buy a two-bedroom flat on the upper floor of a converted building on a garden square in Knightsbridge.

Today, £1 million would buy a basement studio flat on the same square.