Prime London property prices tipped to rise further in 2012

Published 5 January 2012

The property market in London will fair far better than anywhere else in the UK, with home prices in the prime and super prime markets likely to rise by up to 7% in 2012, according to high-end estate agents Glentree Estates.

The head of the company, Trevor Abrahmsohn, believes that the market in the capital will be underpinned by low interest rates and long-term mortgages rates, while the Olympic Games could also help attract even more foreign buyers.

“Interest rates and long term mortgage rates are almost guaranteed to be either static or very low in 2012 which will help underpin the markets,” said Abrahmsohn.

Abrahmsohn reports that the London prime and super-prime market in 2011 grew by about 5% and even the lower priced markets in London still increased by up to 3%, thanks partly to an influx of overseas buyers.

He added: “Eastern Europe continues to provide a myriad of buyers. There is an increasing flow of Chinese and as getting money getting out of China gets easier this will gather pace. The Arab Spring has shaken out a number of Middle Eastern purchasers looking for safe havens and this has increased the flow of buyers from this domain.

“Disgruntled and disaffected Greeks are buying again as are the usual sprinkling of Nigerians and Indians.

“The Olympics will bring in an influx of foreign visitors to the UK some of whom will come with the intention of investing in the London property market providing a boost.”

Mr Abrahmsohn says that there  is plenty of “liquidity and vibrancy” in the rentals sector which will continue due to businesses investing in staff both locally and globally who in turn need rental accommodation. “This will continue to gently pushing rental levels higher in London”, he concluded.