Nov. 5 (Bloomberg) -- Luxury-home prices in central London rose at the fastest rate in four months in October as overseas investors sought less-risky assets, Knight Frank LLP said.
The average value of a house or apartment in the U.K. capital’s most expensive neighborhoods climbed 0.8 percent from September, according to an index published by the London-based broker today. The annual increase was 10.1 percent with demand for apartments outstripping that for houses, Knight Frank said.
“The euro-zone crisis has continued to boost demand for prime central London property among international buyers, many of whom are driven by the search for a safe haven for their assets,” Liam Bailey, Knight Frank’s head of residential research, said in a statement.
Luxury-home values are now 16 percent higher than their previous peak in March 2008 and have risen 52 percent since a post-credit crisis low in March 2009, according to Knight Frank. Better job opportunities in the city fueled demand and foreign investors bought luxury homes to protect their wealth from volatile markets elsewhere in the world.
“Central London property is still seen as a good investment, especially as capital values are on course to rise around 7 percent this year,” EA Shaw said in a Nov. 2 statement. In the third quarter, 87 percent of purchases there were in cash and 61 percent were for investment purposes, the broker said.
The value of the city’s best homes may stall next year as buyers are discouraged by increased property-transaction taxes and possible government proposals to introduce an annual charge on luxury real estate, Hamptons International said last week.
“We expect a number of prospective buyers to hold off on making decisions until further clarity regarding the rules is provided,” Knight Frank’s Bailey said.
Knight Frank compiles the Prime Central London Index from its own appraisal values of a sample of properties in the 13 most expensive central London neighborhoods, such as Kensington, Belgravia, Mayfair and Knightsbridge.
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