London luxury-home prices increase the most since March 2008

EDINBURGH: Luxury-home prices in central London jumped 17% in February from a year earlier, the biggest gain in almost two years, as more buyers competed for a dwindling number of properties, Knight Frank LLP said.

The value of houses and apartments costing more than £1 million (RM5.09 million) rose 3.2% from January, the London-based property broker said in an e-mailed statement on March 1. The annual increase was the largest since the market peaked in March 2008 and compares with an 11.5% advance in January. Prices are still 10% lower than the peak.

“The continuation of the growth in prices and the recent increase in the speed of such growth has been caused by a dramatic shortage of supply,” Liam Bailey, head of residential research at Knight Frank, said in the statement.

The lack of properties for sale, combined with a surge in overseas buyers lured by a weaker pound, helped London’s prime real estate perform better than the residential market as a whole. House prices across the country fell last month for the first time in 10 months, Nationwide Building Society said on Feb 26.

Knight Frank registered 10 new potential buyers last month for every additional property it was asked to sell in the centre of the UK capital, twice the average since the broker started tracking the ratio five years ago. The company now has 30% more new buyers than in any comparable period in the past five years, while it has 22% fewer properties for sale than is normal for this time of year. – Bloomberg LP