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LONDON: Recent global concerns over Southern European sovereign debts, downgrade of credit rating for the US, volatility in the stock markets coupled with the recent rioting and looting incidents in London have had a knock on property prices in England and Wales. Prices in London Central however, has bucked the trend and continue to rise.
HM Land registry quarterly sales data show property prices in England an Wales fell 2.8% in Q2 2011 from the previous quarter .The figures are 1.1% lower than the same point in 2010, shaving off £2,500 off the average price.
In London Central, transaction volumes are 27% below long term averages with just 1,342 sales in London Central during the quarter or an average 100 sales per week. Nevertheless, the average price of flats and maisonettes in London Central had increased by 0.25%, with average prices at £834,225. This marks an increase of £230 per day, or £83,949 over 12 months. Prices have also now exceeded the pre credit crunch peak of £742,054 in Q2 2008, standing 12.4% higher.
“With the dramatic scenes of fire and civil unrest beamed around the world, one could be forgiven for thinking that London’s burning. But the recent troubles were largely isolated in less advantaged boroughs with prime London Central emerging mostly unscathed,” saidNaomi Heaton, CEO of London Central Portfolio Ltd (LCP).
Hugh Best, Head of Investment Management at LCP commented “London Central would be affected if the global economy experiences a double dip recession, but for now investors are simply seeking a safe haven. With the FTSE 100 down 15-20% in just a few short weeks and volatility comparable with the worst points in the Credit Crunch, investors are looking for assets that ride-out fluctuations, whilst offering upside potential. Prime London Central residential provides this.”
George Hankinson, MD of LCP, who had recently visited Singapore, sees a silver lining amidst the gloom. He cites that there is continued demand from overseas investors looking to capitalise on currency opportunities.
“With exchange rates falling below the psychological barrier of S$2 to the pound, over half of our existing clients indicated their intention to re-enter the market. Whilst currency undoubtedly played a big part in their decisions, their desire to invest in an asset with limited downside and continued upside is also compelling,” he added.
