Prime London property rises by 8% this year Written by Andrew Ellinas Wednesday, 01 June 2011
Prime London property rises by 8% this year

The property market is close to the bottom of its long slide, and will start recovering next year, according to a respected firm of analysts.

The Centre for Economics and Business Research (CEBR) believes the acute housing shortage will combine with pent-up demand from people who have deferred buying for fear prices will drop still further.  Prices will rise as a result.  CEBR expects prices in the general property market to drop by a total of about 1.4 per cent over 2011 and begin to recover in 2012. They predict a 16 per cent rise by the end of 2015.

 

The recovery in the general UK market will harden prices in the Prime Central London market, which have been buoyed by demand from abroad.  Figures for May for Prime Central London show a rise of 1.4 per cent in the month contributing to an annualised growth of 8.3 per cent. Prices have now risen by a remarkable 33 per cent since the trough in 2009 to bring prices just above their peak in 2008. In short, Prime Central London has fully recovered from the credit crunch.

This trend is set to continue. Favourable exchange rates mean that overseas buyers see Prime Central London as a bargain, discounted 17 per cent for buyers with US dollars and 16 per cent if they are paying in Euros.

Research from the Halifax Building Society indicates that many young people are abandoning the idea of buying a home at all, discouraged by the large deposits demanded by mortgage lenders. They are, the Halifax says, resigned to a life renting homes.

This should be very heartening news for investors. Now is clearly the time to get into the rental property market. A well-chosen apartment close to a Tube station has never been a more attractive investment proposition.

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