The Prime Central London property market is showing further signs of stabilising said Knight Frank property consultancy.

There was no overall increase in prices in July, said the firm, for the second consecutive month. However, since the beginning of the year properties have risen by 3.7%, which contrasts with the fall of 1.9% recorded for the whole of 2003.

Top Performing Addresses

Kensington Court Gardens, W8 has seen the strongest price growth so far in 2004 with a 15% increase. See following chart for further details.

Growth in overseas buyers

A breakdown of the nationality of the buyers of prime London properties shows that the share taken by UK nationals has shrunk from 72.4% in June to 67% in July. The majority of the new international purchases are European who made up 17% of all buyers in July, showing growth from the 10.1% recorded in the previous month.

Once again the number of buyers from the far east and the middle east were down on figures recorded in recent years.

Noel Flint, Partner at Knight Frank’s Sloane Avenue office, comments: “There is still considerable interest among buyers in the prime property sector. Of course rises in interest rates are affecting the market, but there are enough buyers who do not require a mortgage, or who still view rates as good value, for prices to hold up. Seasonal factors also explain the recent market slowdown."

"We would expect the market to slow a little over the Summer months, so there is also a seasonal element to recent figures.”

Liam Bailey, Head of Residential Research at Knight Frank, comments: "It is now clear that the growth in prime London prices has slowed in recent months and there appears to be a definite plateau effect as interest rates begin to bite in this sector."

"However we are not predicting at the current time price falls, such as those that we witnessed in 2003, and we are standing by our prediction of 6% overall price rise in the sector by the end of 2004."