London super-prime market sets pace

The London prime and super-prime markets are set to witness sustained growth during 2008, despite any potential slowdown in the wider market.

According to research from estate agents Knight Frank, key markets in the capital will lead UK growth for the next 12 to 18 months.

"Central London's position as a world-class property market looks set to continue, however we have seen some renaissance in the Geneva and Monaco markets which we attribute to a re-action to the government’s initial response to the taxing of ‘non-doms’," said Ian Marris of Knight Frank.

There has been widespread opposition from the super-rich in response to Chancellor Alistair Darling's mooted changes to fiscal policy – which could force taxpayers to reveal details of overseas assets with a view to taxation.

However, London's position as the pre-eminent destination for the financial services industry continues to ensure the super-prime market remains buoyant.

"It is our view that as long as the world’s top investment banks, private equity firms and hedge firms regard London as their favoured market its super-prime market will continue to follow the upward trajectory, though not at the levels of growth witnessed in 2006 and 2007," said Liam Bailey, head of residential research at Knight Frank.

It is thought the gains made in the super-prime market will eventually provide a boon to the prime and mainstream markets.

Prices are also being driven by economic factors.

"The law of supply and demand will also have an increasing impact in 2008 and beyond as the lack of properties available in locations targeted by wealthy purchasers comes into play," said Mr Bailey.

"This is set to continue as we estimate there are currently around 1,140 super-prime units in central London’s development pipeline against in excess of 12,400 units in the prime market."