Mid-price central London properties prices up 13%

House prices in central London's prime areas have consistently led the country's property market, however new research shows the growth is bigger than ever.

Research by the luxury property specialists Knight Frank shows that properties in prime central London under £1 million have seen the greatest increase in value, going up by 13 per cent since the start of the year.

The report shows the central London property boom continuing, with monthly price growth of 2.5 per cent in July, and prices in prime central London postcodes now 20.6 per cent higher than a year ago.

Liam Bailey of Knight Frank said: "Analysis of the prime market by price band in July shows that properties in prime central London under £1 million have seen the greatest increase in value.

"This is a clear indication that the strong performance of prime central London is filtering through into the more mainstream market.

"Summer has seen the number of active applicants looking for a property decrease as ‘window shoppers’ withdraw from the market.

"More importantly however, the number of new properties being brought to the market has significantly fallen at a rate greater than that of demand, hence the lasting price increases."

Foreign investment continues to play a big part in the prime areas of the central London property market, with overseas purchasers consolidating their position to 42 per cent of the market overall, and well over 50 per cent of the over £2 million market.

Commenting on this, Liam Bailey said: "Foreign investors and occupiers have returned to the market in force in recent months; since the start of the year confidence has been growing rapidly in the prime London market.

"The rise in prices has helped to maintain confidence levels in the market amongst overseas buyers – who had become noticeably nervous about the direction of the market in early 2005." XXX