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Price Growth Sluggish in Prime Central London Property Market
Trends suggest that while the price growth is slow in the London ‘prime property’ market, prices are at a new record high and are (14%) above their previous peak in March of 2008.
In the three months that led up to August, price growth was only by 1.8%, the lowest three-month growth figure since November 2010. Nevertheless, an increment of 4.8% has occurred over the past six months, despite several potential setbacks, the most noteworthy being the declaration of 40% rise in the top rate of stamp duty in March. Moreover, the new annual charge on properties worth over £2m possessed in certain ownership structures and the reform of non-resident capital gains tax rules, added to these hick-ups. It was also noticed that the London Olympics kept some potential property buyers away from the market during the months of July and August.
It is interesting to notice that the most noticeable price growth over the previous three months happened in the £10m and above price range with a rise of 2.9%. Whereas, the slowest growth, 1.4%, was seen for properties ranging from £1m to £2.5m and this is fairly understandable due to the new stamp duty rate.
Knightsbridge emerged as the hero among the areas performing significantly well with a 3.6% price growth in the past three months and 15.8% in the past year. Other noteworthy positive trends over the past three months were seen in Notting Hill (3.2%) and Belgravia (2.8%).
Prices have risen slightly by 49.9% since the post credit-crunch low in March 2009. What has contributed to this rise is the increasing demand for prime properties within London from international buyers, particularly from Russia, India, France and Italy. This will continue to be a critical factor over the remainder of this year as well.
Another crucial issue is the Euro crisis because looking at the trends of the past two years. It seems that the threat caused by this crisis has always resulted in an increased demand for London property, thereby helping to maintain the overall demand and liquidity in the market.
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