While the rest of the British housing market can only look on in awe, London's real estate sector just keeps going up.
According to the latest numbers from the Land Registry, house prices in the capital rose by another 0.5 per cent last month and are now 2.1 per cent higher than they were a year ago, making London the only region to experience a rise in prices in the past year, despite economic uncertainties.
The heat is being stoked by investors from Asia and the former Soviet Union. According to leading London estate agents Frank Knight, nearly 60 per cent of new-build property sold in central London in the six months to April went to Asian buyers, driven by the favourable exchange rate and London's status as the top destination for international property purchases. Hong Kong buyers were the largest group, 24 per cent, followed by Singaporeans, 12 per cent, and the mainland, 10 per cent. With more than GBP120 million (HK$1.47 billion) worth of London sales going to Asian buyers in just two months, the company has boosted its international project marketing division, moving senior personnel to Hong Kong and increasing overseas support.
That has included the regional director of the international project marketing team, Seb Warner, who says Asian buyers are encouraged by the stable currency, capital growth and lack of supply. He says their preferences are for new builds in the very heart of the city, with high security that offer either high rental returns of up to 6 per cent or annual capital growth of more than 8 per cent.
Asking too much? Not necessarily. Chelsea Creek is a new build on the banks of the Thames. This high-end development has apartments priced from GBP500,000 to GBP5 million.
Many investors think that the 2012 Olympic Games may also be pushing up prices in host city London, but leading property investment and brokerage company Beauchamp Estates believes that is not the case. Director Gary Hersham says his company has had many inquiries from people who are offering upwards of GBP100,000 just to rent for the duration of the Games, but they aren't looking to stay and buy.
Sports enthusiasts aside, he says sales at the top end of the market are robust. 'We specialise in top-end sales, having sold 12 units in excess of GBP25 million in the last 12 months. In most cases, the purchase is a very spontaneous one and by that I mean instantaneous.