London property prices undampened by budget speculation on mansion and wealth taxes

Prices have now risen by 11.3% over the past 12 months, and by 2.7% in Q1 2012, reveals the latest Knight Frank Prime Central London Index. Sales subject to contract in the £5m+ bracket are up 93% in Q1 2012 compared to the same period in 2011, and by 42% across the whole of Prime Central London.

But supply is failing to keep pace, with new instructions up by just 12%, and down by 11% in the £5m+ sector.

Liam Bailey, Head of Residential Research at Knight Frank:

“Prices for Prime London property have been rising strongly for three years on the back of foreign demand and London’s position as a safe haven for investors. Once again our research highlights the status of London property as a unique global asset class, which has gained the confidence of investors looking for strong returns.
 
“The rising level of speculation over a potential mansion tax or new wealth taxes appears to have failed to dampen demand for prime London property, with prices rising at 1.1% in March this year, the fastest rate since last May.
 
“In fact evidence from market activity confirms the market has so far shrugged off the impact of calls for new taxes on the sector. New applicant volumes rose 26% in the three months to March this year, compared to the same period in 2011, and sales being agreed rose by a strong 42% over the same period."