London Luxury Property Sales Increase

Commenting on the situation on the London market of luxury properties, Knight Frank said that in August houses were selling the fastest since the beginning of the credit crunch 2 years ago as foreign investors and cash-rich buyers sought to take advantage of the weak British currency. According to official figures, an average of 250 houses and apartments priced above £1 million were sold this August; the figure compares to only 75 properties sold in August 2008, London property brokers claim. The trend is even more surprising as UK property prices rose for the 5th month in a row in August, reaching the highest increase in 5 years and reducing the annual rate of price decline. However, brokers say that it is exactly the combination of rising prices and returning consumer confidence that contributed to such a high level of luxury property sales in August. Let us remind, that earlier luxury houses in the British capital were only affordable for bankers and other types of financial industry workers; however, since a large number of them got redundant with the beginning of the economic downturn, the majority of luxury property buyers (40%) that are now out there on the market are foreigners. Activity of foreign buyers on the UK property market can also be explained by the constantly weakening pound, which has already dropped by 11% and 8.5% against dollar and euro accordingly. According to data presented by Knight Frank, the prices of luxury UK houses decreased by 15% since the start of the credit crunch and the bankruptcy of Lehman Brothers. In the past 2 quarters, however, they gained 4.7% back (1% month-to-month increase fell on August 2009). Knight Frank’s head in Chelsea, Mr. James Pace, claims that at the moment some properties are being sold at record prices. This usually happens when an extremely high-quality property attracts several buyers who start bidding. For instance, recently the company managed to sell a house for 15% more than it sold a similar house in the same area 8 months ago. It should be noted that all Knight Frank data on luxury property prices is being compiled on the basis of sales agreed in several luxury London neighbourhoods, including Mayfair, Regent’s Park, Notting Hill, Chelsea, Kensington, etc.