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Prime London property prices see 2011 surge

Monday, 9 January 2012 10:34 AM

Prime London property prices rose 12.1 per cent in 2011 after a 0.8 per cent rise in December, according to Knight Frank.

The estate agent said prices in the well-heeled sector are now 40 per cent ahead of their post credit crunch low in March 2009 and seven per cent higher than the previous peak in March 2008.

The strong performance is partly explained by an imbalance between supply and demand, with new instructions falling six per cent and the number of new applicants rising 10 per cent over the year. The number of exchanges rose by 31 per cent and the volume of sales increased by 43 per cent.

Knight Frank said price growth over the past year was especially strong in the £1m to £2.5m bracket. Prices rose by 14.1 per cent, reflecting strong demand from European and Asian investors for investment properties.

The areas seeing the strongest growth in 2011 were Chelsea (16.6 per cent), Hyde Park (14.1 per cent), Kensington (13.9 per cent) and St John's Wood (13.3 per cent).

Liam Bailey, Knight Frank's head of residential research, said: "As 2012 begins, our view is that the prime central London market will see slower but still positive price growth. As outlined in our forecast we expect to see five per cent price growth in 2012."

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