Demand from international investors is helping to keep the London property market buoyant, with asking prices in the capital six per cent higher in the first three months of 2011 compared with the 2010 quarterly average.
New research from CB Richard Ellis (CBRE) has found that while domestic demand is returning, it is interest from further afield which is driving the sector forward. This has been helped by the fact that London remains an attractive place for business.
"International demand is likely to be further buoyed by recent turbulence in the Middle East and by rising inflation in Asia. These uncertain times make London property more attractive, even before considering the favourable exchange rates and the underlying investment credentials," said Jennet Siebrits, head of residential research at CBRE.
However, there still remains a problem of supply. Newly-built housing is being snapped up at a rapid pace and premiums are being achieved above local embedded value, the consultancy noted.
It follows a report from Knight Frank which found that prime central London properties have risen in value by GBP 767 every day over the past year.