Following a record year for prime London real estate, one sector commentator has predicted that capital values will continue to increase, especially during the first half of 2012. Graham Lock, director of Housenetwork, predicted property prices in the UK's capital will climb by approximately five per cent in the first six months of next year, helped a lot by the Olympic Games, which the city will host next summer. However, he added the second half of the year is likely to be defined by the legacy left by the sporting event.
Mr Lock asserted the areas of London where the Olympic Games will be focused may receive a significant boost, which could help prices rise by a further five per cent in certain districts. He cautioned that the outcome may be less positive if the projects are left "half-finished". The robust performance of London's prime residential market so far this year can largely be attributed to overseas buyers seeking a safe haven for their money, according to Savills. In a recent report, the firm noted annual price growth for prime assets stands at 14.1 per cent in 2011, up significantly on the 7.2 per cent recorded at the end of 2010.
Director of Savills research Yolande Barnes commented: "The 2011 growth was unexpected at this time last year and has been almost entirely fuelled in the second half of the year by a massive injection of overseas cash by foreign buyers." Purchasers in this demographic now account for 55 per cent of all transactions to take place in the prime London residential property market, the organisation added.
According to the Knight Frank Central London Index for October 2011, the value of homes in the capital now stands 5.2 per cent higher than its previous peak in March 2008. Liam Bailey, head of residential research at the firm, offered his outlook for the year ahead. "Our forecast for the prime central London market in 2012 is for positive price growth, but at a slower pace than we have seen over the past two years," he stated. Mr Bailey believes this will stand at five per cent by the end of 2012, compared to the double-digit rises experienced over the past 12 months.
- Wednesday 04 January 2012