London’s Luxury Homes Gain Least Since 2009Andrew Blackman and Neil Callanan
Central London luxury-home values rose last month by the smallest annual amount since December 2009 on a drop in the Knightsbridge area, site of Christian Candy’s One Hyde Park complex, Knight Frank LLP said.
The average price of a house or apartment in the city’s most-expensive neighborhoods climbed 7.2 percent from a year earlier, according to data compiled by the London-based broker. The monthly increase of 0.3 percent was the smallest since December and Knight Frank said it expects little change for the whole of this year.
The market for luxury homes in London is cooling at a time when prices for less-expensive properties are picking up, helped by a credit-boosting program by the Bank of England and the U.K. Treasury. While demand for prime real estate remains strong, Knight Frank said would-be buyers of homes valued at as much as 2 million pounds ($3 million) are becoming more price sensitive.
“There is a discernible shift in the market,” Liam Bailey, global head of residential research at the London-based firm, said today in a report about the data. Anecdotal feedback confirms “that buyers are willing to agree to purchases, but only when prices are realistic,” he said.
In Knightsbridge, one of 14 London neighborhoods covered by the report, luxury-property values fell 0.3 percent in May from the previous month. In Belgravia, there was a 0.2 percent decline.
Knightsbridge is home to Harrods department store, Royal Albert Hall and One Hyde Park, the luxury apartment project developed by Candy’s CPC Group as part of a venture with closely held Waterknights. CPC won approval in March for 165 apartments at Sugar Quay in the City of London financial district, where homes on the area’s fringe rose 2.6 percent last month, the most in the heart of the U.K. capital for the period.
British house prices rose the most in six years last month as a shortage of properties boosted values in London, according to Hometrack Ltd. London prices increased 0.9 percent, more than twice the average for England and Wales, according to Hometrack Ltd. U.K. mortgage approvals were little changed in April at 53,710, about half the monthly average in the decade to 2007, the Bank of England said last week.
Prime central London rents were unchanged in May from the previous month, the first time they haven’t declined since June 2012, the broker said in a separate report. Rents have fallen 2.9 percent in the 12 months through May, driven by job losses in the financial-services industry, Knight Frank said.
The monthly cost of leasing a home in Kensington, a district popular with bankers and hedge-fund managers, has risen 2.6 percent this year to date, the most in central London.
Britain’s four biggest banks will have cut about 189,000 jobs by the end of this year from their peak staffing levels, bringing employment to a nine-year low amid a dearth of revenue, according to data compiled by Bloomberg. Royal Bank of Scotland Group Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Barclays Plc will employ about 606,000 people worldwide by the end of 2013, 24 percent below the peak of 795,000 in 2008.