Record monthly price growth in Prime Central London

Prime London property prices increased by 3.1% in the month of March, the highest monthly rate of growth on record, leading to an annual price growth of an astonishing 32.0%, according to the latest Knight Frank Prime Central London Index.

Property prices have been increasing for 27 consecutive months with the last price fall recorded in December 2004.

Chelsea and St John’s Wood continue to be among the best performing areas in prime central London.

The price of houses in prime central London has increased by 10.2% in the first three months of the year while flats increased by 7.5% in the same time period.

Despite City bonus money filtering out of the market, property prices continue to be driven by supply shortages and international demand.

In March the supply of newly available property fell by 27% compared to the total for February while the number of prospective purchasers increased by 16%, fuelling the price rise in the market.

Knight Frank’s Head of Residential Research, Liam Bailey, comments: “The strong growth in prime central London continues, with prices increasing by 3.1% in the month of March. Annual price growth has now reached an astonishing 32% after 27 consecutive months of price rises. Among the best performing areas are Chelsea and St John’s Wood where both houses and flats have been performing strongly. In general, houses have outperformed flats, mainly due to supply shortages. In the past month houses have increased in price by 3.9% while flats grew by 2.2%.

“As City bonus money filters out of the market, continued strong price performance can be explained by supply shortages and ongoing international demand. The supply of newly available property fell by 27% compared to the total for February while the number of new prospective purchasers increased by 16%, fuelling the price rise in the market.”