Houses in central London ‘earn 2,200 a day’

Jonathan Prynn, Consumer Business Editor

14 Dec 2011

Central London house prices continue to defy economic gravity and are on course to end the year up to 13 per cent higher amid the worst financial crisis in living memory.

Agents say the “apocalyptic” backdrop of dire headlines has had almost no impact on demand for homes in the capital’s most desirable areas such as Kensington, Chelsea, Knightsbridge and Belgravia.

Prime central London prices rose one per cent last month alone, bringing the annual growth rate to 12.6 per cent, according to Knight Frank. They have now soared by 40 per cent since the bottom of the market was plumbed in March 2009, the month when the Bank of England cut interest rates to an all-time low of 0.5 per cent.

It means that the owner of a 1 million flat bought a year ago will have “earned” 395 a day from its rising price. For the buyer of a 5 million house the daily increase in value is more than 2,200.

Agents say they have been astonished how the central London property market has become an international safe haven to rank alongside gold and only a handful of other “ultra blue chip” investments.

James Hyman, partners for residential sales at Cluttons, said: “The incentive to buy in central London remains strong with homes that comes to the market in prime areas generating immediate interest and usually selling for well above listed values as long as they are correctly priced.

“December is proving to be a strong month with buyers willing to tie up deals by the end of the year in anticipation of further price growth in prime central London in the first quarter of 2012.”

Knight Frank says it is expecting a further rise of about five per cent in prices next year.

Southwark council today told of its housing crisis as it emerged the number of people waiting for a home will reach 20,000 in the new year. The number of people on the Labour-run council’s list has gone up by 2,000 in the last 12 months.

Deputy leader Ian Wingfield said he feared families could flood into the borough next year. “People cannot afford to pay high rents any more and they are now looking in places, like Southwark that are historically cheaper,” he said.

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It is worth noting that many of these houses in central London have been purchased by MPs and the equally odious members of the lords – with money they fraudulently claimed in “expenses”.

– R.F.Yorke, Yorks, UK, 14/12/2011 14:09
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“The nation is broke. There is no money. We are all in this together. We must all make hard choices.”

Pull the other one! This country is awash with money and the 1% are doing very well thank you out of this supposed “recession”. Look in any estate agent’s window for proof, not just in central London. Those hyper-inflated asking prices are, for the most part, being met, and many of them in mortgage-free cash. No, we are most definitely NOT all in this together, we are the 99%!

– Rob, West Drayton, Middlesex, 14/12/2011 12:58
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