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Written by rosalind renshaw

The central London property market continues to shoot through the roof – but elsewhere, economic uncertainty continues to hold back any meaningful recovery.

Whilst Knight Frank reported central London prices rising by more than £1,200 a day over the last year, the latest RICS survey said that buyer demand in the UK had ticked up only slightly in November.

Quite how meaningful the RICS survey is remains open to question (all those net balances don’t make for the easiest reading). But take a look at Henry Pryor’s blog today.

The RICS maintains, however, that although the pick-up in buyer interest is small, it is the third month in a row where a recovery in buyer interest has been seen.

The RICS also reports that newly agreed sales rose, with each estate agency branch averaging 15.4 sales in the three months to November.

However, nine in ten estate agency members of the RICS said that economic uncertainty continued to dampen the market, followed by availability of mortgage finance (70%) and fear of house price falls (42%).

RICS housing spokesman Alan Collett said: “It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets. However, a meaningful recovery still seems some way off.”

In prime central London, of course, it is an entirely different matter.

Here, the breakaway London market continues in over-drive: Knight Frank reports that prime central London properties have been going up in value by an average of more than £1,200 a day, and are worth nearly 40%  more than in the post-Lehman low, and 6% higher than they have ever been. The firm also reports exchanges running 17% higher than a year ago and sales agreed running at 25% more.

The latest Home report backs up the idea of an ever-widening gulf in home sales, saying that with an increasing north-south divide,  homes in the north-east are taking 88% longer to sell than in Greater London.

The report says the housing markets in the north and south of England bear little resemblance to each other, and that the figures might as well come from two different countries with widely varying economic fortunes.

It said that the contrasting vigour of the two markets is ‘staggering’. The typical home in the north-east takes 192 days to sell, but in London, typical marketing time is 102 days.

It also reports on an increasing north-south divide, with homes in the north-east taking 88% longer to sell than in Greater London.

According to the site’s data, 88,212 homes for sale entered the UK market in November, 21% more than in November 2010. It also says that 62,475 sellers cut their asking prices in November – 13% more than in November last year.


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    "Chinese investors’ share of prime London home purchases in the city’s most expensive neighbourhoods fell by more than half in the third quarter as stock market declines hurt spending power, Hamptons International said. "


    The London bubble on the bubble is really starting to burst now. It is going to get messy.

    I really don't think there is much Greek money left to invest here and with France calling for our credit rating to be downgraded which will make investors cautious.

    • 15 December 2011 21:32 PM
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    @ Fun Boy Agent.

    I like your rose tinted view on this!

    The Prime London Market is 'alien' to the rest of the UK and is its own 'micro-climate'. Typically, A foreign buyer buys a house in Mayfair for £10m, the vendor who never lives in the house and lives in some tax haven cashes the money in and invests somewhere else in the globe.

    So this market which accounts for about 0.01% of transaction volumes in the UK bears no resemblance to our reality.

    The housing market traditionally grows from the bottom i.e FTB's and spreads up the ladder quite rapidly, this only occurs after the meltdown in values when everything once again becomes affordable. At the moment that meltdown is happening in super slow motion due to the authorities atttempts to hold back gravity..

    • 15 December 2011 11:55 AM
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    Ross after your award we could vote you another one if you ban cut and paste rantrave, you know the one that suggests a loan to buy property be illegal!

    Actually leave him, hes funny!

    • 14 December 2011 13:59 PM
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    Last Land Registry (month of October).

    Kensington & Chelsea -0.2% MoM
    London -1.6% MoM
    London YoY reduced to just +0.3% (so any savvy investors have lost 5% of their money through inflation over the last 12 months).

    This could indeed be a tipping point. Positive figures from Prime Central London have boosted the headline figures for Nationwide, Halifax, the Land Registry etc and masked much larger falls elsewhere in the country (like Hartlepool, -20.4% YoY in the same Land Registry release).

    From the same RICS report:
    "the sales to stock ratio slipped back from 21.2 to 21 as the increase in properties coming to the market led to a rise in the level of inventory."

    Also, the increase in vendor instructions seemingly outgrew the number of new buyer enquiries:
    "A measure of new buyer enquiries, an indicator of demand, was unchanged at 7 in November. It was the third month the gauge was above zero, indicating an increase in enquiries. An index showing the number of new property listings rose to 10 from 3."

    • 14 December 2011 11:21 AM
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    No surprise there then, the pebble in the pond ripple effect always starts with activity in London first, then it spreads.

    I keep asking, is it possible we are near, or even at the bottom of the curve?

    • 14 December 2011 11:05 AM
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    Pride comes before the fall...

    Olympics over, the shine will fade from the Greater London market and prices will correct sharply.

    Central London will do well whilst the exchange rates are as favorable as they are and the UK remains as a general safe haven for foreign investors.

    I am an agent within the M25 by the way before the flame wars begin...

    • 14 December 2011 09:04 AM
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