Prices for prime property in central London are recovering after recent setbacks...

Prices grew 0.6% on a monthly basis during February, and annualised figures show that prime central London property continues to rise, albeit at 23.8%, the slowest rate since August 2007

Liam Bailey, Head of Residential Research, Knight Frank comments: “At a time when uncertainty continues to swirl around the financial markets on which London’s prime market relies, February’s growth rate of 0.6%, which is also the monthly average for this sector over the last six months, demonstrates a degree of resolve.

“The three monthly growth rate of 2.8% also strikes an optimistic note for the prime market (properties over £2m in central London).  However, on an annualised basis the long-term trend is that of a continued slowdown, with the rate now at 23.8%; its lowest point since the heights achieved in the late summer of 2007.

Chelsea leading the way

Mr Bailey added: “The chief hotspots in February were Kensington and Chelsea which recorded above average monthly growth rates of 1% and 0.7% respectively.  Chelsea also demonstrated that it remains one of the most sought-after areas of London with an annualised prime property inflation rate of 30%; fractionally ahead of Mayfair where comparable properties increased in value by 29.7% over the last 12 months.

“The full impact of the credit crunch has yet to work through the economy before we can even begin to form a rounded assessment of its true impact on the housing market.  However there are one or two encouraging signs for prime properties in central London.

Knight Frank, Prime Central London Index

Month	12 monthly %  change	6 monthly % change	3 monthly %  change	Monthly % change
Mar-07	31.8%	17.1%	8.7%	2.9%
Apr-07	32.8%	17.8%	8.4%	2.7%
May-07	33.0%	17.5%	8.3%	2.4%
Jun-07	34.5%	18.0%	8.5%	3.1%
Jul-07	36.4%	19.1%	9.8%	3.9%
Aug-07	37.9%	18.5%	9.4%	2.1%
Sep-07	36.5%	16.6%	7.4%	1.2%
Oct-07	34.1%	13.8%	3.6%	0.3%
Nov-07	30.6%	11.2%	1.6%	0.1%
Dec-07	28.6%	8.9%	1.4%	1.0%
Jan-08	26.2%	6.0%	2.3%	1.1%
Feb-08	23.8%	4.4%	2.8%	0.6%

Source:  Knight Frank (March 2008)