Kensington & Chelsea property market does not follow the same rules as the rest of London let alone the rest of the UK

The average price of London property according to data obtained from the Land Registry and other governing bodies for August 2008, is £370,394 yet in Kensington & Chelsea the average price is £1,155,203.

Analysis from http://www.wheresmyproperty.com shows that in Kensington & Chelsea prices rose by 4.2% over the last month but London prices for the same period were down -2.8%.

Frustratingly the news is always about the big picture and never based on local areas within it. This results in confusing and often inaccurate speculation leading to long periods of deadening inactivity.

There is no doubt that the global economy is having a huge impact on the ability of prospective buyers but the dire news and tumbling financial markets are not having the same effect on prospective sellers in these areas.

In the areas of Kensington & Chelsea and Westminster we face very unique land ownership scenarios.

Between the Duke of Westminster, the Earl of Cadogan and the Crown Estate hundreds of acres of London’s most prime locations are secure and one could say, recession proof.

Digging further one will soon realise that the ruling families of the Gulf states also hold substantial property portfolios in these same prime locations. The Al Nahyans of Abu Dhabi, Maktoums of Dubai and Al Thanis of Qatar.

Trickling down the wealth tree are hundreds of other high net worth property owners in Westminster, Kensington & Chelsea who can comfortably afford to hold and wait. It seems unfeasible to hold your breath wait for crashing prices and desperate sellers.

In the profession it is widely agreed that there will be a 20-25% correction in asking prices over the next year. This still leaves owners in profit if they have had their properties longer than 2 years.

The overstretched developers, speculators and those who panic-purchased over the last boom period are likely to get hit and there will be some attractive deals to be done but only for the lucky few. Many buyers have no confidence or any access to funding due to the current banking crisis.

It is inevitable that the current status quo will continue into the new year; very low activity, a huge oversupply of properties for rent and some seriously troubled Estate Agents.

It’s a great time for investors with deep pockets to bulk buy and hold for medium to long term.