Prime London property prices follow different rules to the rest of UK

Following a number of interest rises by the Bank of England property prices of London's best homes have still not seen a slow down. Six months ago agents were talking about prices starting at £1000 a foot (appx £10,000 a meter) and now London's best properties are pushing towards £2000/ a foot.



The top end of the market is fueled by foreign investment; in excess of 50% of properties over £2 million pounds are sold to foreigners. Mostly this demand comes from people who have nothing to sell resulting in a further shortage of stock hence keeping prices strong. Globally, as emerging economies grow and people become wealthy, many aspire to own property in London's best streets. One agent told me recently that he was house hunting with a Mongolian investor looking to buy a £12m home!



We have yet to see the effect on prices as a result of demand from China, India and Brazil.



Those who own London's best homes can also afford to hold on to them so don't expect to see any bargains any time soon. If demand softens prices will just go flat rather than down in London’s best addresses. Sellers will simply sit tight and wait, they can afford to.



London's mature rental market also provides an attractive option for many unwilling to sell in a weaker market. Traditionally as interest rates rise, rentals get stronger. A recent report conducted by the National Association of Estate agents confirmed that the average time a rental property stays on the market is down this year compared to same time last year.



That’s the word on the street, what the agents are saying.