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London's prime property prospering

Properties in upmarket Central London locations experienced stunning price growth during March, new figures reveal...

High-end properties in the capital increased in value by 3.1 per cent, according to Knight Frank's Prime Central London Index.

This has led to inflation at the top end of the property market running at 8.9 percent in the past three months, 17.3 percent in the past six months and 32 percent in the year to end-March.

But while the houses in prime central London increased in value by 10.2 percent in the first three months of the year, flats saw a more modest 7.5 percent lift.

According to the index, prime property prices in central London have now risen for 27 consecutive months, with the last price fall recorded in December 2004.

Overseas demand driving growth

Liam Bailey, Knight Frank's head of residential research, commented:

"Among the best performing areas are Chelsea and St John's Wood, where both houses and flats have been performing strongly.

He explained: “Massive supply shortages and overseas demand are driving the growth, with the number of available properties falling by 27 per cent in March”.

He added: “As City bonus money filters out of the market, continued strong price performance can be explained by supply shortages and ongoing international demand.”

"The supply of newly available property fell by 27 percent compared to the total for February, while the number of new prospective purchasers increased by 16 percent, fuelling the price rise in the market,” he concluded.