Non-UK buyers drive up prime London house prices

Written by Barton Wyatt Virginia Water Estate Agents

Prime central London homes have gained about 1,200 pounds a day in value over the past year, taking their average price to 3.2 million pounds ($5 million) at end-November and underscoring their role as a safe haven for rich non-UK buyers.

Property agent Knight Frank said prime London residential property prices rose 1 percent in November, contributing to an annual growth rate of 12.6 percent. Prices have risen 39.5 percent since their post-recession low in March 2009.

“Our forecast for the prime central London market in 2012 is for positive price growth, but at a slower pace than we have seen over the past two years,” said Liam Bailey, Knight Frank’s head of residential research.

“We are expecting a rise of 5 percent across the whole of next year,” he said in a statement.

Prime central London property has been in vogue in 2011, with the Arab Spring and euro zone debt crisis serving as catalysts for rich buyers — particularly from Europe’s southern periphery — to snap up blue-chip properties to protect their wealth.

Prime London house prices had gained 1,202 pounds a day in value over the past year, Bailey said.

On Nov. 16, Bailey said London had performed better than any other European capital city, with its well-heeled Chelsea, South Kensington, Mayfair and Belgravia areas in demand, a trend he expected to continue.

On Monday, mortgage lender Halifax said it expected Britain’s housing market would likely stagnate in 2012, with low interest rates offset by a squeeze on household budgets.

Halifax said it expected house prices to be strongest in prosperous parts of Britain, such as London and the south-east, Surrey and weaker in areas dependent on public sector employment.