The average price of a home in prime central London increased appreciated by an average of 0.8% in October compared to the previous month, according to the Knight Frank Prime Central London Index.
The index shows that property prices rose by 10.1% year-on-year, with prices now 52% higher than the post-financial crisis low of March 2009.
The hike in property prices is being caused by the growing supply-demand imbalance in the capital – a trend that looks set to continue, due in part to high demand from international homebuyers.
Knight Frank’s Liam Bailey said: “The eurozone 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.
“As we noted in last month’s results, this growth has taken place despite the impact of the March budget’s 40% rise in stamp duty for £2m+ homes and the prospect of new rules for an annual charge on £2m+ properties held in certain ownership structures. We expect a number of prospective buyers to hold off on making decisions until further clarity regarding the rules is provided. This is expected to come in the Autumn Statement on 5 December.”
Knight Frank’s forecast for 5% growth at the start of the year in prime central London prices in 2012 is likely to be exceeded – with prices likely to end the year higher by around 8%.
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