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Prime London price growth slows

Prime London price growth has slowed, with the average property price up just 1.5% to £3.8m in July, according to Knight Frank.

This compares to the monthly increases of 1.6% and 1.7% reported in May and June respectively, according to the London-headquartered agency’s Prime Central London Residential Index for July.

Nevertheless, July‘s increase is the fourth consecutive monthly increase seen this year, with the annual decline in prices now at 14.4% compared with 17.2% in June.

The index also reveals that property in Chelsea and Kensington has proven most popular, with prices up more than 6% since the low reached in March. And in terms of property type, houses have outperformed flats.

Meanwhile, overseas buyers in the £1m-plus market have grown their market share from 35% to 43% over the past 12 months.

Liam Bailey, head of residential research at Knight Frank, says: “It has been another strong month for the prime London residential market, with prices up across every sub-market, by area, price band and property type.

"While the UK market has seen a similar bounce in recent months, the prime markets appear to be leading the market by some margin."

He adds: “Rising prices in central London stem from three fundamental issues - returning confidence, resilient demand and plummeting supply.

“One factor underpinning all else is the fact that prices fell very hard and very fast a little more than six months ago. Partially due to the panic engendered by the Lehman's collapse, prices slipped 15% in the five months to January this year. By the early summer property in London was perceived to be offering very good value."

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