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Prices in central London set to rocket, says Knight Frank 12 September 2011

A new report from Knight Frank predicts that property prices in parts of central London will more than double in the next four years.

Knight Frank says the drivers will be volatile financial markets and major new transport projects such as Crossrail.

The London market has been booming, in contrast to most of the rest of the UK although last week, a company buying up distressed properties said it was now getting calls from parts of London hit by riots, with sellers complaining that their sales had fallen through and buyer interest had vanished. However, Knight Frank's report concentrates on the positive.

Grainne Gilmore, Knight Frank’s head of research, insisted: “London is really seen as a safe haven for global money. We ran some figures showing how prime property is doing in terms of asset classes. It beat the FTSE 100 tracker over the last ten years by quite a long margin and certainly gives gold a run for its money.

She went on: “Crossrail is going to change a lot of things. If you live in Barbican or Farringdon you’re going to be able to get directly to three airports within minutes.”

As a result, Knight Frank is forecasting that prices in this area and in the nearby City are set to rise 118% by the end of 2015, second only to the Vauxhall area in south London, where prices are forecast to jump 140% thanks to the redevelopment of Battersea Power Station along with the new US embassy to be built nearby.

This particular forecast could be problematic, however, with recent reports that the Battersea Power Station project is – yet again – hitting snags.

Altogether, Knight Frank thinks there are 13 hotspots in the capital which will outperform the 30% rise in prices it is predicting for central London as a whole by the end of 2015.

By most measures, central London house prices have already grown by over 10% this year.

Gilmore said: “There is a possibility we could see strong double-digit growth by the end of this year ... the figures just keep getting stronger.

“We definitely wouldn’t class what is happening at the moment as a bubble. The fundamentals of the market in London are quite different to the rest of the UK.”

 

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