Luxury-home prices in central London gained for the 15th consecutive month in January as overseas investors seeking to protect their wealth competed for the few properties for sale, Knight Frank LLP said.
Values of houses and apartments costing an average of 3.7 million pounds ($5.8 million) rose by an average of 0.9 percent from the previous month, the London-based broker said in a report today. Prices advanced almost 12 percent from a year earlier.
Non-U.K. buyers have turned to London real estate to preserve wealth as they face political, economic and financial turmoil including Europe’s sovereign-debt crisis and the overthrow of regimes in the Middle East. That investment helped lift values of luxury residences by 42 percent since March 2009, the low point for London’s prime residential market following the credit crisis.
“Economic and even political turmoil have provided the impetus for growth -- with a sharp growth in investors looking for a safe-haven location for at least part of their wealth portfolio,” Liam Bailey, Knight Frank’s head of residential research, said in the report.
Knight Frank predicts prices of high-end properties in central London will gain 5 percent this year because of the shortage of properties for sale.
The ratio of prospective buyers registered at Knight Frank’s outlets in London and the number of properties the broker had for sale was about 4.1 to one, according to the statement. That was up from 3.7 to one during the past five years.
In the two most expensive boroughs, Kensington & Chelsea and Westminster, “supply remains constrained and competition for the best property is rife,” said Turnbull Property, a broker that advises wealthy buyers.
Thirteen percent of homes sold in central London last year achieved prices of more than 1,500 pounds a square foot, a proportion that exceeds the levels of the previous peak in the market, Turnbull Property said, citing the Land Registry.
Knight Frank compiles its luxury-homes index from its own appraisal values of a sample of the same properties in the 13 most expensive neighborhoods of central London, including Belgravia, Kensington and Knightsbridge.