London’s prime market looks steady with market growth increasing by 1% last month compared to November, a reversal of the trend displayed over the previous two months.
House price growth continues to slow annually, but at 28.6% is at a similar level to December 2006 (28.7%) according to research from Knight Frank (www.knightfrank.com).
The area with the highest growth is the south west of London at 1.8%, the largest rise over the last quarter.
Liam Bailey, head of research at Knight Frank, says, ‘Coming amid largely pessimistic debate about the impact of the international credit crunch, December’s prime central London figures of 1% growth appear to buck the trend of recent months. The quarterly figure also supports the notion that this particular market is steadying with growth slowing just 0.2% to 1.4% over the quarter.’
Mr Bailey believes the Bank of England’s decision to cut base rates by a quarter point at the beginning of the month could have influenced the upturn, although ‘the impact of City bonuses may serve as a better explanation for the slight improvement in December’s growth rate.
However, Mr Bailey warned that it would be unwise to suggest London’s prime market has weathered the credit crunch on the back of these figures and any job losses could lead to property purchase becoming a discretionary opposed to investment-making process.’