prime property prices rise again in February 2008

Given the current turmoil in the money markets and the uncertainty that continues to be fuelled by the impact of the credit crunch, the prime London property market has demonstrated some resilience so far in 2008. While the mainstream property market stutters under the combined pressures of tightened lending criteria, buyer caution and seller apathy, the prime London market has put in another solid performance in February 2008.

Average monthly asking prices have risen 3.1%, with all regions achieving positive price growth. While monthly price growth rises, annualised price growth has slowed significantly. Annualised prime London price growth reached 13.9% in February, some way lower than the peak of 32.1% witnessed back in June 2007. The most exclusive areas of prime London continue to flourish, proving that the demand from ultra-wealthy buyers remains strong in the capital’s hotspots, with annualised growth in Belgravia up 32% and prices in Mayfair up 47%.

Like the prime London property market, the prime country market is continuing to achieve monthly growth in asking prices, despite difficult economic conditions and a subdued mainstream market. February’s rise in asking prices of 1.1% constitutes the largest monthly increase since July 2007. Indeed, the market had stuttered in recent months as the volume of property for sale accumulated to record levels, staving off any chance of significant price growth being achieved.

But since the turn of the year, the build-up of stock has started to alleviate, reducing to more traditional levels and culminating in a return to positive monthly price growth. The South East is the area where asking prices are benefiting from a more constrained supply, with monthly prices rising by 2.6%. In particular, locations within the Home Counties, such as Buckinghamshire (up 4.2%), Berkshire (up 4.2%), Surrey (up 5.0%) and Bedfordshire (up 6.1%), are seeing above-average price rises.

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