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Prime London lettings stock 97% higher than 2008

Wednesday, 11 March 2009 3:07 PM

Prime London lettings stock rose again in February, taking it 97 per cent higher than this time last year.

According to the Prime London Prime Index, released today, last month saw the fourth consecutive rise in the value of property in the prime London area. However, unlike the lettings market, sales stock has fallen.

For the first time in the last four years, London annualised sale prices had fallen - now 0.5 per cent lower than February 2008. South-west London and Islington and City & Docklands were the most underperforming regions.

Andrew Smith, Primelocation.com's, head of research, said: "This is the fourth successive month that the Prime Index has recorded growth in the London market, a trend which is being driven by a decline in stock levels and the return of positive annual growth in Central London.

"Central London has always been a magnet for international capital and at the moment lower prices and the weaker pound are attracting overseas buyers in search of bargains. The recent cut in Base Rate to 0.5 per cent will keep the pressure on the pound so this is a trend which we expect to continue in the months ahead.

"Interestingly the markets closest to London have yet to show any signs of stabilisation. Indeed, over the past six months the South East and the South West have been the poorest regional performers."

In the Prime London lettings market, prices fell for the eleventh successive month and were 13.72 per cent lower than this time last year with February stock levels up 97 per cent year-on-year.

Mr Smith added: "Tenants continue to benefit from lower rents and landlords remain under pressure. However, on the positive side, many well established investors will benefit from the lower interest rates and this is enabling them to absorb the impact of lower yields."

Prime Country values also fell for the seventh successive month, seeing a reduction of 0.39 per cent. But the properties on the market are only 0.90 per cent lower than this time last year. Both Scotland and East Anglia and the East Midlands showed an increase in average asking prices.

Charles McDowell, prime London property consultant, said: "Prime Central London property values are holding up well thanks to the international desire for boltholes in this area. London is still very much the destination for international business and many European and North American buyers see a decent London flat as one of the few gold plated investment opportunities available to them. While statement properties may not be coming to the market, boltholes in the £1m-£3m range are doing exceptionally well."

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