Super Prime London is continuing its exponential rise in prices, while the prime market in the capital is experiencing a gentle slowdown, says Knight Frank’s latest report.
Prices in London have slowed with annual growth now sitting at 30.6%, down from the high of 37.9% in August., as the credit crunch hastens the moderation the market already required, it says.
The situation has changed very fast from a sellers’ market to a buyers’ market; vendors are now competing harder to achieve quick sales and ambitious pricing has effectively ended in all London markets but one: super prime properties. Prices for houses above £6m continue to perform strongly ? growing 3% in the three months to November ? whereas prices in the prime market between £1-£2m only grew by 0.3% in the same time.
This strength at the top end is still attributed to interest in the capital from a growing range of international buyers, including the ongoing presence of Russians in the market, and Middle Eastern buyers who can offer ever increasing amounts based on soaring oil costs. But this state of affairs may not continue forever, warns the report: ‘There is justifiable concern related to the willingness of wealthy foreign residents to stay in London,’ it says. ‘Firstly, a slower economy next year means the remarkable growth in financial activity will come to an end? Secondly, the recent tax changes announced in the pre-budget speech mean the Government are suddenly making life a little more difficult for the group who have done most to raise prices of top end property.’