London prices going up "¦

RESIDENTIAL property prices in prime central London have increased to the highest monthly rate of growth in three decades, according to Knight Frank.

Knight Frank’s head of residential research Liam Bailey said there has a phenomenal growth in central London in recent years – led by a strong City economy, very healthy bonus rounds and growing employment and population levels in London.

“But this is only one half of the story – the demand side.

“On the supply side we have seen the strong demand requirements met by very constrained property availability – stock levels in Q2 2007 were 11% below the same period in 2006 and 23% below the same period in 2005. Add into the mix rising domestic wealth and rising foreign wealth coming into the country we can see why prices have risen strongly,” he added.

Knight Frank shows residential property prices in prime central London increased by 3.9% in July, the highest monthly rate of growth since the start of the index in 1976.

And the annualised rate at 36.4% in the 12 months to July is the highest rate since mid 1979.

According to Knight Frank, houses have outperformed flats in terms of price growth in each month since January this year, with house prices rising by 4.2% compared to only 3.6% for flats in July.

Australian Property Journal