Print friendly version 3 Sep 2010

Prime London property price growth continues to soften

The annual rate of property price rises in London has fallen from 21% in April to 16% in August, reported Knight Frank.

Price falls continue across all price brackets but properties worth £1m to £2.5m have seen the largest falls, said the property company.

The cost of luxury property in central London fell by 0.1% in August, a decline which followed the 0.5% fall in July.

Liam Bailey, Knight Frank's head of residential research said many predicted the market would weaken after strong growth since March.

"To me one of the main reasons for the softening in prices relates to the fact that demand and supply have become more closely aligned in recent months, with supply of stock for sale rising 22% over the past four months and new applicant volumes falling back marginally by 8% over the same period."

"Another critical issue to the health of the London market is the strength of the overseas marketplace, which has been weakened slightly by Sterling's rise against the Euro and the US Dollar, by 8% and 6% respectively over the last three months," he said.

Bailey said the next four weeks will be all important, as the autumn market gears up with early signs looking promising.

"The London economy is outperforming the UK average by some margin, with strong employment data from Morgan McKinley showing vacancies in the City and Canary Wharf markets up by 71% year-on-year in July. This suggests fears of a significant correction in central London values are overdone," he added.

STAY UP TO DATE: Subscribe to email alerts Subscribe to RSS