It seems there is a growing trend of being too posh to pay in central London and buyers of luxury property are increasingly wanting prime real estate without the price tag. While values are continuing to rise for prime property in the capital, investors are becoming more price sensitive, according to research from Knight Frank. Values increased by 0.3 per cent during May, taking growth levels so far this year to 3.2 per cent. Over the past 12 months, prices in prime central London have increased by 7.2 per cent - however, this has come at a price.
Liam Bailey, global head of Knight Frank Residential Research, claims there is growing evidence that buyers won't commit to homes with over-ambitious price tags. "The strength of the sub-GBP 2 million sector provides one indication that buyers are becoming more price sensitive. In addition our index results showed modest price falls in Belgravia and Knightsbridge (0.2 per cent and 0.3 per cent respectively) in May, despite strong demand. There is a discernible shift in the market, with anecdotal feedback confirming that buyers are willing to agree to purchases, but only when prices are realistic."
Nevertheless, demand is strong overall, with the number of new applicants between January and April up by 40 per cent on the same time in 2012. This has translated into higher sales volumes across the market, with a 17 per cent rise in sales recorded for the first four months of the year compared to January-to-April last year. Yet most of this activity occurred in the lower price brackets. There was a 28 per cent increase in sales of homes with a value under GBP 2 million. Conversely the super-prime (GBP 10 million) sector posted an initial decline in year-on-year sales in January and February. However, this was overturned by a 57 per cent annual sales rise in March and April.
Another trend in the market was also noted - flats in prime central London are in high demand. Knight Frank claim lateral living has become more popular and there is now higher than average price growth. The value of a luxury flat in the area is now 3.5 per cent higher than at the beginning of the year.
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- Wednesday 05 June 2013