- The annual rate of price change has improved to -3.2% (from -8.8% in September)
- Average prices are still 16% below their March 2008 peak
- Price growth in some areas has hit 13% since March this year
Liam Bailey, head of residential research, Knight Frank, commented:
“The central London housing market has experienced an extraordinary period in recent weeks. A shortage of property for sale (down 20% year-on-year), a weak pound which has encouraged overseas buyers (overseas prospective buyers have risen 45% year-on-year) and the return of bonuses to the City all contributed to pushing prices up by 2.1% in October, the fastest monthly rate of increase since July 2007.
“Prices are now 10% higher than they were at the low reached in March this year, although they are still 16% below peak levels (March 2008). However despite the revival of international buyer interest, the undoubted driver of strong price growth in recent months has been the return of the UK buyer, in particular those employed in the ‘City’.
“UK buyers represented 67% of all £5m+ buyers in the three months to the end of October, compared with only 43% in the preceding three months.”
Market sector performance
The market rise has been led by Chelsea, Kensington and Notting Hill, where prices have risen by nearly 6% in three months – almost £1,340 a day for a £2m property. The strongest performing price bracket continues to be £1m-£2.5m – which has risen 5.3% in three months. The top price bracket (£10m+) has begun to see some life (with a 1.9% rise in price in October) after a slow recovery during the first nine months of 2009.
While there was anecdotal evidence of rising stock volumes in September, this failed to materialise in October. The number of new properties being brought forward for sale in October was almost 60% below the level seen in October 2008 and 58% lower than September this year.
Record prices
In the last month, Knight Frank has handled four £10m plus sales to UK, Russian and Chinese buyers, three in Belgravia with asking prices of £16.25m, £17m and £32m and one in Knightsbridge with an asking price of £11.5m.
In Kensington, prices for individual properties in Academy Gardens have risen 25% since 2007. A two bedroom flat recently achieved £1832 per square foot having previously sold in June 2007 for £1400 per square foot.
