Prices have risen 33% since their recent post-credit crunch low in March 2009.Prices are now 1.3% higher than their previous peak in March 2008.
Foreign demand remains a key driver of price growth, favourable exchange rates mean overseas buyers are benefitting from significant discounts (17% for US Dollar buyers and 16% for Euro buyers) on 2007 pre-crash prices.
Liam Bailey, head of Knight Frank Residential Research, comments:
“Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009.
"While prices have now risen by a third from their low point in March 2009, foreign buyers are still buying at a discount when they factor in currency movements.
"Despite a slight strengthening in Sterling since early 2009, and the recent strong growth in prices, the typical buyer purchasing a home using Euros will find that prime London property is 16% cheaper than in September 2007 when the financial crisis started. Buyers using US dollars or a currency pegged to the greenback will benefit from a 17% discount over the same period.
"While Asian buyers account for the majority of sales of new-build properties in the capital (60% of zone 1 new-build sales in the 6 months to April 2011), European buyers are among those at the forefront of the market for existing homes. In terms of non-UK buyers French buyers account for 6% of the market, Italians 4.5%, Greeks 3.1% and Swiss 2.5%.”
