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After a three percent bump in February, prices for prime London residential property are up 19 percent since the spring of 2009, according to new data. Prices in the core London neighborhoods are only 10 percent below the market peak of March 2008, the latest Knight Frank Prime Central London Residential Index shows.
Foreign demand is leading the surge, with 45 percent of the purchases of more than £2 million in the last 12 months purchased by non-U.K. buyers, the study found.
Demand from Asian investors, in particular, has risen 120 percent from a year ago, led by buyers from Hong Kong, Singapore, Malaysia and Thailand.
“The continuation of the growth in prices and the recent increase in the speed of such growth has been caused by a dramatic shortage of supply, with 22 percent fewer properties available for sale at the current time compared to normal for the time of year,” said Liam Bailey, head of residential research for Knight Frank.
Demand is particularly strong in the top end of the market, above £5 million, in neighborhoods like Mayfair and Kensington, “where supply of excellent properties is very thin and buyers are increasingly willing to pay figures above guide prices to secure the right house.”
