Published on : Mon, 11 Apr 2005 00:00GMT
by : David Parker

Following the cooling off in the property market, pricing across many regions may seem confused about which direction to take, but home prices in London’s prime areas are doubtlessly upward bound. In fact, in March, London recorded the biggest rise for 10 months, promising a revival this spring.

Property prices in areas like Kensington in west London, Canary Wharf and Notting Hill were being boosted by corporate demand. The upper stratum of properties is clearly marked by less supply and more demand. Prices of million-pound plus properties were raised in response to increased demand from high net worth individuals (or HNIs).

The higher the price the more the demand, strangely, seemed to be. Property in the £5m-plus price range has seen more demand, both from foreign as well as domestic buyers. There are reports saying that a few properties in the most 'posh' areas of London were sold to some affluent young buyers from Russia.

The £1m-to-£2.5m price range has been nearly as active with top-notch corporate executives choosing to park their spare millions in this investment option. It has been observed that HNIs were less likely to take mortgage finance and if they did, were least likely to be affected by rising interest rates.

A reliable source from the property market said prices in central London market had risen by 0.8 percent during March, the biggest rise since May 2004. Prices were 0.9 percent higher compared to March 2004.

Meanwhile the lettings market continues its healthy ascent with rents up 0.7 percent during March, the biggest increase in the last six months. Apartments, penthouses and the like, in areas like Canary Wharf and Notting Hill, had seen raised rents and the tenants – mostly top level corporate executives were not complaining.