London luxury prices rise most in four months
Values up more than 10pc year on year in October as overseas buyers seek safer assets
Luxury-home prices in central London rose at the fastest rate in four months in October as overseas investors sought less-risky assets, broker Knight Frank said.
The average value of a house or apartment in the most expensive neighbourhoods climbed 0.8 per cent from September.
The annual increase was 10.1 per cent, with demand for apartments outstripping that for houses, Knight Frank said.
"The euro-zone crisis has continued to boost demand for prime central London property among international buyers, many of whom are driven by the search for a safe haven for their assets," Liam Bailey, Knight Frank's head of residential research, said.
Luxury-home values are now 16 per cent higher than their previous peak in March 2008 and have risen 52 per cent since a post-credit-crisis low in March 2009, according to Knight Frank.
Better job opportunities in the city fuelled demand and foreign investors bought luxury homes to protect their wealth from volatile markets elsewhere in the world.
"Central London property is still seen as a good investment, especially as capital values are on course to rise around 7 per cent this year," agent EA Shaw said.
In the third quarter, 87 per cent of purchases there were in cash and 61 per cent were for investment purposes.
The value of the city's best homes may stall next year as buyers are discouraged by increased transaction taxes and possible government proposals to introduce an annual charge on luxury real estate, Hamptons International said last week.
"We expect several prospective buyers to hold off on making decisions until further clarity regarding the rules is provided," Knight Frank's Bailey said.
Knight Frank compiles the Prime Central London Index from its own appraisal values of a sample of properties in the 13 most expensive central London neighbourhoods, such as Kensington, Belgravia, Mayfair and Knightsbridge.