Central London house prices still shooting up

Prices in central London are now 10.1% higher than a year ago, and 52% higher than in March 2009, the bottom of the market.

Knight Frank says that last month, prices in prime central London rose another 0.8% – despite a number of wealthy buyers deciding to delay purchase decisions until after the Autumn Budget statement.

Liam Bailey, Knight Frank’s head of residential research, said: “Prices have been climbing now on a monthly basis since November 2010.
 
“The eurozone crisis has continued to boost demand for prime central London property among international buyers, many of whom are driven by the search for a ‘safe haven’ for their assets.
 
“This growth has taken place despite the impact of the March budget’s 40% rise in Stamp Duty for £2m-plus homes and the prospect of new rules for an annual charge on £2m-plus properties held in certain ownership structures.

“We expect a number of prospective buyers to hold off on making decisions until further clarity regarding the rules is provided. This is expected in the Autumn Statement on December 5.
 
“Despite the Chancellor dismissing the idea of introducing a ‘mansion tax’ during the Conservative Party conference, the talk of such a levy on £2m-plus homes has created further uncertainty.”
 
He added: “Our forecast for 5% growth at the start of the year in prime central London prices in 2012 is likely to be exceeded – with prices likely to end the year higher by around 8%.”

In a separate report, Cluttons said that 87% of house purchases in the capital are by cash buyers.