Predictions for the year ahead in the prime central London property market are upbeat, which may encourage an increasing number of people to make a real estate investment in the city. Knight Frank recently revealed homes in the capital experienced price growth of 12.1 per cent during 2011, with a 0.8 per cent rise in values recorded in December, compared to November. The firm pointed out property prices in prime locations in London are now 40 per cent higher than they were in March 2009, when the market was badly hit by the collapse of Lehman Brothers.
Although the organisation is anticipating continued growth for values in the residential real estate sector in 2012, it believes this will slow down over the coming 12 months to stand at around five per cent by the end of the year. However, Naomi Heaton, chief executive at London Central Portfolio, has suggested investors could see greater capital appreciation. "Including the downturn during the credit crunch, prices from 1995 to date have increased on average by 8.2 per cent [per annum]. There is no reason, given the turbulent times that this has incorporated, not to expect this to continue over a further five-year period," she asserted. Ms Heaton stressed that any property investment in the central London market needs to be part of a long-term strategy, though.
Earlier this month, director of residential research at Savills Lucien Cook highlighted international buyers as the driving force behind the prime central London real estate sector at present. He added a shortage of new stock coming on to the market will help keep prices stable in the near future. Mr Cook's assertion about the importance of overseas investors was backed up by a statement released by WA Ellis partner Karen Carpmael earlier this month. She noted the majority of transactions at her firm in the run up to Christmas involved overseas buyers.