Residential property prices in prime central London increased by 3.1% in June, the highest monthly rate of growth since the start of Knight Frank?s index in 1976, according to research from the agent released today.
However this exceptional rate of growth is being driven by a certain section of the market, as more detailed analysis reveals that much of it is concentrated at the very upper end.
The report says that properties priced above £4m have experienced growth of as much as 43% in the past 12 months, while prime properties priced under £1m grew by only 1.6% in the same time. Over the past three months price growth in under £1m bracket in particular has eased, possibly reflecting its relative sensibility to wider economic trends.
However, things are considerably different for those at the top of the scale: ?London?s continuing ability to attract wealthier people from around the world has detached the super-prime market from the wider marketplace,? said Liam Bailey, Head of Residential Research at Knight Frank.
?A slowdown at the upper end of the prime market in our view will require a significant economic shock affecting both the London and global economy or government intervention in the form of taxation or changes to the status of non-domicile residents.?
Outer prime central London has also performed extremely well, found the report: areas such as Wapping, Hampstead and Wimbledon have seen price increases of 11.4% in the first half of the year, bringing their annual price growth percentage to 21.8%, which, although not as dramatic as prime central London, is still clearly outperforming the broader London market.
?Key market indicators together with the traditional seasonal slowdown suggest that price growth in prime central London is likely to slow,? Mr Bailey continued. ?In June alone, the number of applicants to the number of properties available has fallen by 5.5%, implying an improvement in relative supply. We expect to see price growth in prime central London settle at 25% by the year end,? he concluded.