London will buck the trend in 2008

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by Kay Murchie

According to Savills estate agents, the prime central London property market will weather the property storm predicted next year.

Property price falls are expected across much of the country next year but Savills are predicting growth in the prime central London market of about 5% next year.

Nationwide, Experian and the Intermediary Mortgage Lenders Association (IMLA) have all indicated house price inflation will be flat or in decline next year, but strong growth in London is expected from property specialists Savills.

Lucian Cook, director of research at Savills, said so far, you haven’t seen the reduction in prices or indeed the slowing in growth rates in the capital to anything like the same extent as some of the other areas in the country.

He continued that London has been by far the strongest region in the UK with even a fall in City bonuses unlikely to be damaging to house prices.

Mr Cook also suggested that the market would be boosted by overseas wealth, while in the rest of London there would be increasing differentials in price between areas caused by a ‘flight to quality’, a process he said was already occurring across other regions the UK, such as the midlands, the north and Wales.

Mr Cook said property investors may therefore look carefully at prime areas in London, both central and in the suburbs, and look to buy in the expectation that the market may increase again.

A survey from Findaproperty.com, Country Life, compared property prices according to their proximity to certain underground stations and established that the Circle Line (which runs through some of the trendier parts of central London) had the most expensive properties of any area served by the tube.

Victoria, Farringdon and Portland Street were the stops with the most expensive neighbourhoods, while even the least expensive locality on the line, near Aldgate station, saw prices above the London average at £396,000.

The fact remains that prime areas with good transport links will be the ones which attract the high prices.