While house prices in the rest of the country wallow in the doldrums, the London housing market seems as strong as ever, at least with respect to prices.
According to the estate agent Frank Knight average central London house prices have risen Â£767 every day over the last year, reports myintroducer.com. Capital values increased by 1% last month with an overall annual growth rate of 8.3%
Over the last 3 months properties in the Â£1 million to Â£5 million range have increased in value by 4% with Mayfair, Marylebone, St John's Wood and Kensington leading the way with a healthy 10% price growth over the last year.
The head of Frank Knight residential research, Liam Bailey, said that 'The dislocation between the central London market and the wider UK market has widened into a chasm over the past 12 months', boosted by foreign buyers. And went on to say that 'Assuming that central London’s jobs market can continue to outpace the wider UK market during 2011, it is likely that prices at current levels will be sustainable even if overseas demand begins to wane'.
Within the London market it seems that North London is still coming out on top, as the Chesterton Humberts/Centre for Economics and Business Research (CEBR) APRIL 2011 House Price Poll of Polls shows and reported in propertytalk Live! (http://propertytalklive.co.uk/london-focus/6238-london-prices-north-of-the-river-pull-away-from-the-south)
Last year the average house price in North London was Â£58,595 more than in the South. But that gap has widened over the last year to Â£62,345 with the average house in North London costing Â£367,594, which is a 1.2% increase over the year.
Chesterton Humberts' CEO, Robert Bartlett, said 'London remains the only region where house prices are higher compared to last year, with London prices up by 0.3% over the year, supported by a shortage of instructions and strong demand.Â The growing divide between North and South London house prices reflects the intense international interest in prime Central London property as well as the historic premium put on transport as South London is less well served by the Underground'.
CEBR's chief executive, Douglas McWillioams said 'We are seeing a slow and gradual improvement in the level of mortgage lending which is largely down to the Bank of England keeping rates at a record low for 26 months. However, even though mortgage rates remain lower than before the credit crunch, households are being squeezed on three fronts: lack of access to credit, slow wage growth and low interest rates on savings have all kept confidence low and points to a difficult year ahead for the consumer'.
Can the London housing market really continue to outstrip the rest of the country for much longer? Especially if foreign investment money dries up and the Olympics are fading into old news.