The price of London’s best homes has risen for an unprecedented 10 quarters in a row but the market is in no danger of overheating, upmarket estate agent Savills claimed today.
The agent’s prime London index — covering homes with an average price of £3.5 million — shows “modest” price growth of 17.6% since the end of 2010. Savills said the top end of the market had “not come close” to 10 successive quarters of growth since it started monitoring London’s top properties more than 30 years ago.
Prices across London overall have risen 2.2% in the past three months, picking up from a much slower 0.8% advance in the final quarter of 2012, to stand 4.7% higher over the past year.
Savills director Yolande Barnes said: “In historic terms, this rate of growth looks steady for a prime residential market and much less volatile than some other prime world markets. It flies in the face of those who claim the market is overheating.”
The rise come as the weak pound and fears over the eurozone crisis offset the impact of the Chancellor’s stamp duty raid on £2 million-plus homes last year. South-west London — areas such as Richmond, Putney and Wandsworth — are also catching up with central London as domestic buyers are chased out of Kensington, Mayfair and Knightsbridge. The ripple effect has triggered annual house-price growth of 5.6% in the south-west — almost double the 3% rate at which prices have risen in central London over the past year.
Barnes added: “We had expected values to flatline this year, but the market, having for now absorbed the impact of new and increased taxation and the uncertainty concerning any possible future increases, continues to focus on London leading to a steady rate of quarterly growth in the first three months of this year. Unexpected falls in the value of sterling mean that London still looks relatively cheap on the world stage, particularly set against rises in the costs of buying and owning in other world cities.”
