Luxury-home prices in central London climbed at the slowest rate in five months in February as more owners put properties on the market to profit from 16 months of gains, Knight Frank LLP said.
Values of houses and apartments costing about 3.7 million pounds ($5.9 million) rose by an average of 11.6 percent from a year earlier, the London-based broker said in a report today. Prices advanced 0.7 percent from January and are now 8.9 percent higher than the market’s last low point in March 2009.
Overseas investors have turned to London real estate to preserve wealth as they face political, economic and financial upheaval in their home markets. This year, Italian purchasers replaced Russians as the biggest group of non-U.K. buyers, accounting for 8 percent of all transactions, Knight Frank said.
Liam Bailey, head of residential research, said prices for high-end houses and apartments in central London will probably gain about 5 percent this year, repeating an October forecast. “The longer prime house prices continue to rise, the obvious question continues to emerge -- will these rises eventually be replaced by falls?” he said.
In the U.K. as a whole, residential property prices rose 0.9 percent in February from a year earlier as first-time buyers took advantage of a tax exemption that expires this month, Nationwide Building Society said March 1.
Knight Frank compiles its luxury-homes index from its own appraisal values of a sample of the same properties in the 13 most expensive neighborhoods of central London, including Belgravia, Kensington and Knightsbridge.
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