Luxury-home prices in central London rocketed upwards at their fastest rate of increase for a year during May. The pound’s weakness on the international currency exchanges helped to encourage a large number of overseas buyers to compete for a declining number of properties for sale, according to agency Knight Frank LLP.
Residential property in the US $6 million bracket saw values jump by +1.4% on April, the seventh straight monthly increase. The market was up by 1% in April.
Homes in upmarket areas like Knightsbridge and St. John’s Wood have seen their prices rise by a third since March 2009, topping the peak reached in March 2008.
The volume of homes for sale in London is 5% down year-on-year says Knight Frank.
“For many investors and potential owner-occupiers based in fast-growing emerging countries, prices of prime central London property are actually well below the 2007 peak in their own currency terms,” adds Camilla Dell, managing partner and founder of Black Brick Property Solutions LLP. Her London-based company advises luxury-home buyers in southeast England.
Also, competition is increasing for properties in need of renovation because there’s a shortage of fully-equipped homes on the market, says Stuart Bailey, who heads Knight Frank’s Belgravia office. “We had sufficient demand that we didn’t even need to do any formal marketing.”
According to Bailey, only one of the 15 homes that his team has sold for more than £10 million in the past 12 months has gone to a UK buyer. Overseas property investors are definitely dominating the market.