London luxury-home prices increase most since 2008

EDINBURGH: Luxury-home prices in central London rose last month at the fastest annual pace since April 2008 as a growing number of buyers chased fewer properties on the market, Knight Frank LLP said.

Values of houses and apartments costing more than £1 million (RM5.46 million) climbed 11.5% from a year earlier, the London-based property broker said in a statement on Feb 3. The 1.1% gain from December was the 10th straight monthly advance and the smallest since August. Prices remain 12% lower than the market’s peak in March 2008.

“There still seems to be considerable life left in the recovery in pricing,” Liam Bailey, head of residential research at Knight Frank in London, said in the statement. “While buyers are back in force, vendors are few and far between.”

Some potential sellers are waiting to put houses on the market until they see how the outcome of the UK general election, which must be held by June, affects regulation of the financial industry and taxation of banker bonuses, Bailey said. There is also concern that the withdrawal of the government’s economic stimulus package and cuts in public spending will impact the housing market.

Most of Knight Frank’s offices in central London have 15% to 20% fewer properties for sale than normal for this time of year, the broker said. At the same time, the number of potential buyers in January was 15% higher than the five-year average. – Bloomberg LP