Prime property prices in central London increased a further 1.1% in March taking the annual increase to 11.3%, according to the latest index from Knight Frank.
The volume of sales being agreed in the £5 million plus bracket was up by 93% in the first quarter of this year compared to the same period in 2011, and by 42% across prime central London, the index also shows.
Prices are rising because supply is failing to keep pace, with new instructions higher by just 12%, and down by 11% in the £5 million plus sector while new applicant volumes rose 26% in the first three months of 2012 compared to the same period in 2011.
The number of sales, subject to contract, were up by 42% in the first quarter of 2012 compared to 2011.
'These positive indicators have contributed to prices rising in March by a further 1.1%, the highest rate since May 2011, when prices increased by 1.4%,' said Liam Bailey, head of residential research at Knight Frank.
'Prime central London property prices have been rising strongly for three years, on the back of foreign demand and London's status as a safe haven for investors,' he added.
The strongest rises in the first quarter of the year were seen in the £1 million to £2.5 million price band where they increased by 3.2% and the sub £1 million band which saw a 3.1% increase. The £10 million plus bracket saw the smallest rises at 1.5%.
Among the areas to see the fastest price growth were Marylebone which was up 7%, South Bank up 3.5% and Knightsbridge up 3.4%.
The data also shows that apartment prices have risen more than house prices, up 3% and 2.5% respectively.
SOURCE Propertywire
