London price increases reach record levels

Both monthly and annual price increases within the housing market in London have reached their highest levels for almost 30 years, according to new research.

Prices in the capital rose by 3.1 per cent in June – the largest increase since records began in 1976, with the annualised rate rising to 34.5 per cent, according to the latest Knight Frank prime central London index.

These figures compare to an increase of 2.4 per cent in May, when year-on-year growth stood at 33 per cent. However, price increases were largely driven by sales of properties worth £4 million or more, analysts observe.

Such homes are often sold using cash transactions and are hence less likely to be affected by recent interest rate rises, the Times reported recently.

By contrast, price growth for properties worth under £1 million was more muted, standing at 1.6 per cent for June.

"Over the past three months price growth in the sub £1 million price category has eased possibly reflecting the recent interest rate rise and the sensitivity of this part of the market to general economic trends […] we expect to see price growth in prime central London settle at 25 per cent by the year end," noted Liam Bailey, head of residential research at Knight Frank.


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