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London's best houses have increased in value by 20% over the past year, according to a new Knight Frank report

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
 
 
For further information, please contact:
Liam Bailey, Residential Research, Knight Frank, +44 (0)20 7861 5133, liam.bailey@knightfrank.com
Niki Riley, Press Office, Knight Frank, +44 (0)20 7861 5037, niki.riley@knightfrank.com
 
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%

Source: Knight Frank Residential Research
 
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

Source: Knight Frank Residential Research
 
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%

Source: Knight Frank Residential Research
 
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%

Source: Knight Frank Residential Research