Property prices in London grew by a record rate last month, it has been suggested.
In Knight Frank's prime central London index, house prices in the capital rose by some 3.1 per cent over the course of June, which in turn drove the annual rate of inflation to 34.5 per cent. Consequently, the company reported that the month's growth resulted in the highest year-on-year increase noted for some 28 years.
According to the figures, "super-prime" property was reported to have particularly caused the price rises, with those homes worth more than 4 million pounds said to have seen a 43 per cent increase over the course of the year. Meanwhile, housing under the 1 million pounds price bracket was reported to have decreased by 1.6 per cent.
Overall, the average property in the capital is reported to cost more than 330,000 pounds. However, Knight Frank suggested that the housing market could be starting to cool down as the effect of five interest rates by the Bank of England's monetary policy committee (MPC) impacts upon consumers' ability to make secured loan repayments.
Liam Bailey, head of residential research for Knight Frank, said: "Over the past three months price growth in the sub 1 million pounds price category has eased, possibly reflecting the recent interest rate rise and the sensitivity of this part of the market to general economic trends". He added: "We expect to see price growth in prime central London settle at 25 per cent by the year end".
Mr Bailey also noted that over the course of June, the proportion of those looking to buy a home compared to the number of properties available decreased by some 5.5 per cent. The expert suggested that this figure could be "implying an improvement in relative supply".
At the beginning of this week, research carried out by Nationwide reported that although properties across the country have risen in price between April and June the growth has been at a slower pace. Over the second quarter of 2007, the average house increased by some 2.1 per cent to stand at 181,810 pounds.
Although every region of Britain has been said to have seen growth of at least five per cent during the past 12 months, chief economist Fionnuala Earley suggested that "even London and Northern Ireland - the two most buoyant regional markets - saw the quarterly pace of house price inflation slow". However, with these areas seeing growth of 15.7 and 54 per cent respectively, Ms Earley suggested "unsustainable" price rises may still cause difficulties for those making secured homeowner loan repayments.
Meanwhile, speaking on Channel 4's News at Noon programme, Michael Taylor, senior economist for Lombard Street Research, suggested that the effect of recent MPC increases could soon cause an end to the recent "period of strong house price inflation". He suggested: "House price inflation could be zero, there could be no house price gains whatsoever and in one or two regions even the possibility of falling house prices". The economist suggested that such a move could happen by next year and may take place "possibly quite abruptly".
![[Valid RSS feed]](http://www.talkinmince.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
