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Knight Frank: London Prime in decline

London's prime property market registered ‘barely discernable’ growth in April…

The overall growth rate was a mere 0.1%, and only properties priced between £2.5m and £5m and those over £10m grew in value (0.3% and more than 1% respectively). The overarching trend over the last three months is one of continuing slowdown, with a modest inflation rate of 0.8%; the lowest rate of growth since February 2005

Over the last 12 months prime property prices have risen by 17.3%, less than half the rate seen at the height of the market in August last year and the weakest rate of annual growth since May 2006. The ratio of achieved price to asking price has fallen markedly over the last 12 months with an average of 96% of original sale price being achieved in April; in April 2007 the figure was 102%

Super-Prime soaring

Liam Bailey, Head of Residential Research at Knight Frank comments: “The Knight Frank ‘Prime Central London’ index for April provides further evidence of the weakening state of the flagship UK property market with poor growth across the board. Even though property in this elite category is now worth 17.3% more than a year ago this disguises the fact that we are now in the grip of a major housing market slowdown; in August last year home owners in this category were seeing growth at an annual rate of around 38%.

“In truth while there is some movement in the market and sellers are continuing to find buyers, April’s monthly rate of growth only mirrors that seen in March at a near par 0.1%. 

“Disappointingly for those in the prime, rather than the super-prime market, growth this month was concentrated in the £10m + market, where some properties have seen almost 5% growth in prices since the turn of the year. The super prime market has become pretty much the only bright spot in the UK over the course of the last six months.