Prime London property prices have fallen a total of 1% since June, although annual growth still sits at 12% in the year to October, thanks to strong growth at the start of 2010, says new research from Knight Frank.
Liam Bailey, head of Knight Frank Residential Research commented: ‘It is fairly clear where the short term direction of the London market is headed. Demand for property has fallen back over recent months and supply has risen – these broad trends have acted to push prices lower over recent months and it seem likely that this trend has some way to go. It would be wrong to be universally gloomy, London is a market that attracts demand from across the globe and for a variety of reasons.’
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Prices do seem to be holding up where demand is strong from foreign buyers, such as Kensington and Chelsea, and there is also increasing interest from new markets like Canada and Brazil, says the report.
‘The outlook for central London remains relatively positive compared to the rest of the UK market, due to the unusual confluence of circumstances which play out in this market – with foreign buyers joined by City Bonus money by the year end,’ said Liam Bailey, head of residential research.
‘Our expectation is that bonus buyers will not rush into the market in November and December, but that we will see a more delayed process with the market strengthening in January and February as these buyers wait to gauge the short term direction of the market,’ added Mr Bailey.