Knight Frank: Prime central London prices up 0.1%
Knight Frank: Prime central London prices up 0.1%
Friday, 09, May 2008 02:04
The average price of a property in the prime central London market increased by a barely discernable 0.1% in April, according to figures released by Knight Frank.
Research from the estate agents show it was the top-end of the market which attributed for the growth.
Over the month only properties priced between £2.5m and £5m and those over £10m grew in value, registering growth of 0.3 and one per cent respectively.
However, Knight Frank finds the overarching trend over the last three months is one of continuing slowdown, with a modest inflation rate of 0.8 per cent - the lowest rate of growth since February 2005.
The length of time it takes to sell a property also suggests the market is in decline.
While 12 months ago vendors could expect to see their property move through the market in 47 days, now the for sale board has to stay up for around two and a half months 76 days.
Homes are also selling for an average of 96 per cent of their asking price, compared to 102 per cent a year ago.
Knight Frank lays responsibility for the slowdown at the door of the financial markets - with the lack of mortgage finance slowing down purchases.
"Although there is little expectation of a further cut in the base rate this week, the truth is that even if there were the effect would be limited," said Liam Bailey, head of residential research at Knight Frank.
"The real impact will only come once the Bank of England's 'special liquidity scheme' has worked its way through the money markets and lenders feel confident lending to each other again."
The Bank of England has cut interest rates three times in the past six months, by 0.25 per cent in December, February and April, to a level of five per cent.
In addition, the Bank has also offered £50 billion through a special liquidity scheme' in order to lubricate the financial markets.
It is hoped these measures will encourage banks to lend to each other, as well as to consumers.
Chris O'Toole