House price growth slides for prime London properties

Prime London house price growth has slowed, newly-released research has found.

Carried out by Savills, it discovered property in this category only increased by 0.9 per cent in the second quarter of 2012. This represents an annual hike of six per cent, which is the lowest level since September 2009.

This slowing down could see lettings in London become more popular, as many may no longer see the value in moving their homes on until the market recovers. Despite the setback, Savills believes the sector is still well placed and annual growth will continue in positive territory for the foreseeable future.

Lucian Cook, director of Savills research, stated: "It is now three years since the markets bottomed out and we've seen a period of intense activity and price growth, but it now seems unlikely that the market will have the capacity for further price growth in the short term."

He added there are a number of reasons for the slowdown, including the problems in the eurozone and changes to stamp duty. The expert went on to note volatility is to be expected when a housing market cycle is in its infancy. However, because of constrained stock and global wealth generation, Mr Cook remarked the fundamentals of the market are still sound.

Chelsea, Mayfair, Belgravia and Knightsbridge all bucked the city trend and recorded growth of 1.2 per cent or more in the second three-month period of the year.

It is also unlikely the capital will see any great movement post-Olympics as had initially been expected. Instead, it is landlords who are best placed to take advantage of the sporting spectacle.

This is because there will be long-term income streams as a result of all the building work that have been carried out in order to make the Games a reality. Indeed, once the event is over, the London Organising Committee of the Olympic and Paralympic Games will make a number of properties available for sale and rent.

Posted by Ben Carter

Published 28th June, 2012

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