Bloomberg News

Apartment Prices in Best London Areas to Rise in 2012, JLL Says

October 19, 2011

Oct. 19 (Bloomberg) -- Apartment prices in London’s priciest neighborhoods will rise next year as investors seek less risky assets amid political and financial instability, according to a survey by broker Jones Lang LaSalle Inc.

About 84 percent of developers said values will increase in 2012, Chicago-based Jones Lang said in a statement today. More than a quarter said the gain would exceed 5 percent, while 37 percent predicted a 2 percent to 5 percent increase. Just 5 percent expected a decline.

“Strong appetite from overseas buyers is clearly key,” Neil Chegwidden, residential research director, said by e-mail. “The international dimension has also led to core central London locations outperforming the rest of the U.K. market and we expect this to continue next year.”

Foreign investors are buying London homes to protect their wealth amid economic and political volatility at home. They made up about 65 percent of the market for homes costing more than 5 million pounds ($7.9 million), according to a survey published last week by broker Savills Plc.

Sales of the city’s most expensive homes reached a record in the nine months through September, Savills said last week. Deals for homes valued at more than 5 million pounds rose to 3.2 billion pounds from 2.1 billion pounds a year earlier.

Prices in the areas covered in the Jones Lang report increased 3.8 percent in the 12 months to September. The survey covered properties with a value of 700 pounds per square foot to 2,000 pounds located in Kensington and Chelsea, Westminster, the City of London and Canary Wharf. Jones Lang surveyed 60 companies in the final two weeks of September.

--Editors: Ross Larsen, Andrew Blackman.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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