Prime London property prices up 21%

Prime London home prices increased by 1.3% in April and are now 21% higher than at the bottom of the market in March 2009, according to the latest Knight Frank Prime Central London Residential Index April 2010.

The Knight Frank Report shows that the volume of prime London properties sold increased in April, up 18% year-on-year, but dropped by 23% on a month-on-month basis, largely due to the uncertain outcome of today's general election.

Strong demand for homes in Central London is being fuelled by overseas nationals, particularly in the £2m plus sector. Foreign buyers now account for 56% of all property purchasers in the area.

There has been a surge in the number of buyers from Greece buying in homes in London, up from 3% to 6% in the £2m plus sector over the past year, the reveals. Russian and Italian buyers both account for 13% of the market.

Rupert des Forges, partner at Knight Frank Knightsbridge, said: "There has been a real trend for wealthy Greek families to invest in UK property for a variety of reasons but the safe haven [for their money] driver is a big one."

Liam Bailey, head of residential research at Knight Frank, said the prime London market recovery has continued into its second year with prices rising continually for 13 straight months. But he acknowledged that sales had fallen since March.

Bailey commented: "Anecdotal evidence suggests that the election has had the impact of slowing purchase interest in the market, and certainly throughout April the market has experienced a more difficult period for agents in trying to get deals to stick together.

"The real bright spot throughout the market has been international demand. These buyers have been taking an ever larger share of the market following the weakening of the pound. The number and range of nationalities widens every month, with German, Indian, Pakistani and Greek buyers all coming through at the current time,' he said.

‘Ironically there does seem to have been a positive impact on the London market from the current Eurozone sovereign debt crisis, with European buyers becoming much more active. With the current crisis focused on Greece there has been a direct impact in terms of demand from this source."