London's best houses have increased in value by 20% over the past year, according to a new Knight Frank report
Date : 02 July 2010
Knight Frank's Residential Research team has just launched it's latest London Review, the definitive guide to the prime central London housing market.
Key points from The London Review
- Overseas buyers now account for over 50% of all prime London residential purchases, and in the £5m+ sector they account for over 68% of all buyers
- In Mayfair, Knightsbridge and Hampstead overseas buyers account for more than 60% of all prime market purchases
- The number of different nationalities buying in central London has grown from 30 in mid 2008, 48 in mid 2009 to 51 by mid 2010
- International demand has helped to drive prices higher by 24% in the 15 months since March 2009, prices are only 6% below their March 2008 market peak
Liam Bailey, head of residential research, Knight Frank, commented: “Prime central London house prices rose by 0.9% in June, meaning prices now stand 20% higher than a year ago. The recovery in prices has been driven in large part by the strength of demand from international buyers.
“The range of buyers has risen dramatically over the past year as the weak pound created opportunities for overseas purchasers to enter the market with significant discounts on peak 2008 pricing.
“Despite the fact that prices have risen 24% since last March, and stand only 6% below their March 2008 market peak, the weakness of the pound ensures that effective discounts available to foreign buyers are still very significant. Chinese buyers are still able to secure a 31% discount on 2008 prices. Buyers from Hong Kong, the US, Saudi Arabia, Singapore and Malaysia are all able to secure discounts of around 28%.
“Between December 2008 and March 2009 international buyers’ share of the £5m+ London market soared from 39% to 48%. By June this year it had hit 68%.
“Central London is now a market apart, not only is demand seemingly immune from wealth attacks, but so too is supply. The proportion of un-mortgaged owners in central London is 59%, compared to 41% for the UK. Central London is dominated by discretionary owners, they can sell when they choose to, meaning that when prices fall so too does supply.”
Ends
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Ends
Data appendix
Relative change in prime central London prices, taking account of price and currency shifts (%), March 2008 to June 2010
|
|
Discount
|
|
Chinese Yuan
|
-30.6%
|
|
Euro
|
-6.8%
|
|
Hong Kong Dollar
|
-28.4%
|
|
Indian Rupee
|
-16.9%
|
|
Russian Ruble
|
-4.3%
|
|
Singapore Dollar
|
-27.1%
|
|
US Dollar
|
-28.4%
|
|
Malaysian Ringgit
|
-27.2%
|
|
Saudi Riyal
|
-28.4%
|
Prime London (£2m+) international purchasers’ market share and key buyer nationalities, 12 months to June 2010
|
Location
|
%
|
Key nationalities
|
|
Belgravia
|
56%
|
Russia
|
India
|
UAE
|
|
Chelsea
|
52%
|
France
|
Greece
|
India
|
|
Fulham
|
55%
|
France
|
Italy
|
US
|
|
Hampstead
|
66%
|
Russian
|
Italy
|
Nigeria
|
|
Hyde Park Estate
|
54%
|
UAE
|
France
|
Hong Kong
|
|
Kensington
|
58%
|
Russia
|
US
|
Germany
|
|
Knightsbridge
|
61%
|
Russia
|
UAE
|
India
|
|
Marylebone
|
43%
|
France
|
Italy
|
India
|
|
Mayfair
|
66%
|
Russia
|
Saudi
|
Malaysia
|
|
Notting Hill
|
49%
|
US
|
Italy
|
France
|
|
Richmond-On-Thames
|
40%
|
France
|
India
|
Saudi
|
|
St Johns Wood
|
41%
|
Russia
|
US
|
Egypt
|
|
Wandsworth
|
23%
|
France
|
Italy
|
Greece
|
|
Wimbledon
|
43%
|
France
|
Russia
|
US
|
|
Wapping
|
53%
|
France
|
Hong Kong
|
Malaysia
|
|
Canary Wharf
|
55%
|
Italy
|
Hong Kong
|
France
|
International buyers in prime London, top 20 nationalities by share of all international buyers, 12 months to June 2010
|
Rank
|
Country
|
%
|
|
1
|
Russian Federation
|
13.9%
|
|
2
|
United States of America
|
11.2%
|
|
3
|
Italy, Italian Republic
|
8.8%
|
|
4
|
India, Republic of
|
8.0%
|
|
5
|
France, French Republic
|
6.0%
|
|
6
|
United Arab Emirates
|
6.0%
|
|
7
|
Germany, Federal Republic of
|
4.2%
|
|
8
|
Greece, Hellenic Republic
|
4.2%
|
|
9
|
Norway, Kingdom of
|
2.8%
|
|
10
|
South Africa, Republic of
|
2.8%
|
|
11
|
Australia, Commonwealth of
|
2.3%
|
|
12
|
China, People's Republic of
|
2.3%
|
|
13
|
Hong Kong, Special Administrative Region of China
|
2.3%
|
|
14
|
Iran, Islamic Republic of
|
2.3%
|
|
15
|
Ireland
|
1.9%
|
|
16
|
Kazakhstan, Republic of
|
1.9%
|
|
17
|
Egypt, Arab Republic of
|
1.4%
|
|
18
|
Singapore, Republic of
|
1.4%
|
|
19
|
Austria, Republic of
|
0.9%
|
|
20
|
Brazil, Federative Republic of
|
0.9%
|
The Knight Frank Prime Central London Index
|
|
KF Prime Central London Index
|
12 month % change
|
6 month % change
|
three monthly % change
|
monthly % change
|
|
Jul-08
|
4,491.4
|
-0.1%
|
-5.7%
|
-5.2%
|
-1.9%
|
|
Aug-08
|
4,414.5
|
-3.8%
|
-7.9%
|
-5.3%
|
-1.7%
|
|
Sep-08
|
4,321.3
|
-7.0%
|
-9.9%
|
-5.6%
|
-2.11%
|
|
Oct-08
|
4,152.6
|
-10.8%
|
-12.4%
|
-7.5%
|
-3.90%
|
|
Nov-08
|
4,003.2
|
-14.1%
|
-14.1%
|
-9.3%
|
-3.60%
|
|
Dec-08
|
3,914.6
|
-16.9%
|
-14.5%
|
-9.4%
|
-2.21%
|
|
Jan-09
|
3,769.5
|
-20.9%
|
-16.1%
|
-9.2%
|
-3.71%
|
|
Feb-09
|
3,713.3
|
-22.52%
|
-15.9%
|
-7.2%
|
-1.49%
|
|
Mar-09
|
3,652.2
|
-23.86%
|
-15.5%
|
-6.7%
|
-1.65%
|
|
Apr-09
|
3,666.3
|
-22.65%
|
-11.7%
|
-2.7%
|
0.39%
|
|
May-09
|
3,725.9
|
-20.05%
|
-6.9%
|
0.3%
|
1.62%
|
|
Jun-09
|
3,789.0
|
-17.22%
|
-3.2%
|
3.7%
|
1.69%
|
|
Jul-09
|
3,846.5
|
-14.36%
|
2.0%
|
4.9%
|
1.52%
|
|
Aug-09
|
3,886.3
|
-11.96%
|
4.7%
|
4.3%
|
1.04%
|
|
Sep-09
|
3,937.7
|
-8.88%
|
7.8%
|
3.9%
|
1.32%
|
|
Oct-09
|
4,020.0
|
-3.19%
|
9.6%
|
4.5%
|
2.09%
|
|
Nov-09
|
4,067.2
|
1.60%
|
9.2%
|
4.7%
|
1.18%
|
|
Dec-09
|
4,154.6
|
6.13%
|
9.6%
|
5.5%
|
2.15%
|
|
Jan-10
|
4,201.2
|
11.45%
|
9.2%
|
4.5%
|
1.12%
|
|
Feb-10
|
4,334.8
|
16.74%
|
11.5%
|
6.6%
|
3.18%
|
|
Mar-10
|
4,367.0
|
19.57%
|
10.9%
|
5.1%
|
0.74%
|
|
Apr-10
|
4,425.7
|
20.71%
|
10.1%
|
5.3%
|
1.34%
|
|
May-10
|
4,487.7
|
20.45%
|
10.3%
|
3.5%
|
1.40%
|
|
Jun-10
|
4,528.1
|
19.51%
|
9.0%
|
3.7%
|
0.90%
|
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
Knight Frank area definitions
Prime central London is taken to include: Mayfair, Hyde Park, Marylebone, St John’s Wood, Regent’s Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and the South Bank (from Westminster Bridge to Tower Bridge/Shad Thames)
Prime London is taken to include all the above plus: Canary Wharf, Hampstead, Richmond, Wandsworth, Wapping and Wimbledon.