UK Prime Property Breaking New Records

on May 31, 2012
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The latest Prime index from PrimeLocation.com shows that UK prime property market is currently on the rise, with record average asking prices for prime homes at £478,797. This is 4.8 percent or £21,756 higher than the same time last year. A major contributor to this is London’s prime property market, which remains strong and recorded an all-time average high of £1,307,801 – £158,047 or 13.7 percent more than a year ago.

The biggest increase over the one year period was seen in Wandsworth – 29.3 percent, where the current prime asking price is £1,293,745. But the priciest homes in London are currently in Kensington and Chelsea with asking price standing at an average of £2,829,595. The City of Westminster is trailing in second place at £2,329,389. Other expensive locations are Camden (£1,903,726), Hammersmith and Fulham (£1,795,306), Barnet (£1,480,823) and Richmond Upon Thames (£1,106,306).

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These price tags might be a bit rich for the average Brit and, in fact, Nigel Lewis, property analyst at PrimeLocation.com, points out that most of London’s priciest homes are owned by wealthy overseas investors. This is, he adds, one of the reasons behind the completely different behavior of the market in the capital, in comparison to the rest of the UK. The demand is high and that “will continue to keep this prosperous market afloat despite the sluggish economic performance seen across the rest of the country.”

!m[](/uploads/story/103/thumbs/pic1_inline.png)Speaking about the rest of the country, there is a month on month increase in prime asking prices in all areas of the UK. The only exception is the north east, which has so far fallen every month in 2012. The north west on the other hand has performed excellently, with the strongest regional year-by-year performance outside London, resulting in a 7.5 percent increase over last year.

In addition to the substantial increase in the prime market, PrimeLocation.com’s Prime index shows that there has been an increase in prices for all UK properties. However, the gap between prime and non-prime property continue to increase. Currently, the average property price is £220,957, which is 0.6% higher than in March.
The numbers indicate that the UK prime property market is strong and stable and that the troubles in global economy have little effect on it. It seems that UK’s wealthiest owners can leave their worries behind for now, as they continue to prosper. But how long the upward trend will continue is unclear, as some analysts warn that the property market will eventually crash, which will likely affect the prime property segment as well. The increasing gap between prime and non-prime property is a worrying sign. And with European economies falling apart right and left, there is no guarantee that the market will be able to resist forever in times of global recession. Not to mention that the fall of the US market in 2008 has made people more cautious, when it comes to investing in property.

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