Foreign money has been pouring into London this year and, as a result, areas such as Chelsea have seen house prices jump by 20% since the beginning of January. Apparently, that’s the equivalent of £4,500 per week for the average property in the area.
According to Knight Frank, the estate agency, Central London has seen prices rise by 6% so far this year, that’s the biggest jump since 2000. But recently there has been a move towards cheaper homes. Apparently, it’s the houses worth a mere one to two million pounds, which are in demand now, with four million plus homes not quite so popular. According to Liam Bailey, head of residential research at Knight Frank, the move down the price ladder could mean the “beginning of the end” of the London property boom.
Much of the strength in the London property market can be put down to the collapse of Enron. The loss in confidence in US corporate reporting, during the first few years of this decade, led to the creation of the Sarbanes-Oxley regulations. But now the US has gone from one extreme to the other, and many companies looking to escape the draconian US regulations are looking to London to IPO.
© Investment & Business News 2013