London Luxury-Home Prices Rise by the Least Since January
London Luxury-Home Prices Rise
Simon Dawson/Bloomberg
Prices of houses and apartments costing more than 1 million pounds ($1.55 million) rose 16 percent in August from a year earlier, the London-based real estate adviser said in an e- mailed report today.
Prices of houses and apartments costing more than 1 million pounds ($1.55 million) rose 16 percent in August from a year earlier, the London-based real estate adviser said in an e- mailed report today. Photographer: Simon Dawson/Bloomberg
London luxury-home prices increased last month by the smallest amount since January as a stronger pound deterred foreign buyers and more properties went on sale, Knight Frank LLP said.
Prices of houses and apartments costing 1 million pounds ($1.55 million) or more rose 16 percent in August from a year earlier, the London-based real estate adviser said in an e- mailed report today. They fell 0.1 percent from July, the second straight decline after 15 months of gains.
“The main reasons for the softening in prices relate to the fact that demand and supply have become more closely aligned,” Liam Bailey, Knight Frank’s head of residential research, said in the statement. “The overseas market has also been weakened slightly.”
A rebound in values this year caused by a shortage of homes on the market prompted more owners to try to sell in the past two months, creating more of a buyers market. The pound also gained about 9 percent against the euro and 3 percent against the dollar since the start of March, making London less attractive for foreign investors who helped drive the rally earlier in 2010.
The number of properties for sale jumped 22 percent in the past four months, while new buyers decreased 8 percent, according to Knight Frank.
‘Overinflated’ Prices
“The key question is where the market is heading in the remainder of 2010,” Bailey said. “Early signs are promising, with a number of vendors beginning to look at asking prices, which have become in many instances overinflated.”
The biggest drop in prices last month was among properties costing 1 million pounds to 2.5 million pounds, Knight Frank said.
Concern that the central London housing market faces a “significant” decline is probably overdone, given a 71 percent jump in job vacancies in the U.K. capital’s two main financial districts in the past year, Bailey said.
The top 10 percent of central London homes by value rose 1.4 percent last month to an average of 3.5 million pounds, taking the annual increase to 12 percent, according to Primelocation.com, a property website.
Prices throughout Britain fell 0.9 percent in August from July, the biggest decrease in six months, Nationwide Building Society, the country’s largest customer-owned lender, said in a separate report today. They are 3.9 percent higher than a year earlier, the weakest pace since November.
The slump is “likely to remain relatively modest,” as there is little evidence of people being forced to sell, Nationwide Chief Economist Martin Gahbauer said.
Knight Frank compiles its luxury-homes index from estimated values of properties in the Mayfair, St. John’s Wood, Regent’s Park, Kensington, Notting Hill, Chelsea, Knightsbridge, Belgravia and South Bank neighborhoods of London.
To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.
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