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Economic conditions

London Property Market Sees Strong Recovery in 2004

Strategic Insights

— 1 min read

The London property market experienced a resurgence in the first quarter of 2004, with prices of prime property in the capital rising by 2.5 percent over the year to March, according to Knight Frank, the estate agent. This marked a significant improvement from the 1.9 percent fall recorded in 2003. The most expensive properties, worth £3m or more, led the recovery, with a 1.3 percent increase in March, outpacing the 0.5 percent rise in all London prime property.

Key Takeaways:

  • The prime London market staged a strong recovery in 2004, with prices rising by 2.5 percent over the year to March.
  • Foreign investors, typically American or Russian, and renewed interest from City bankers due to higher bonuses, contributed to the price increase at the top end of the property market.
  • Americans accounted for 12 percent of buyers in the first quarter of 2004, up from 1 percent in the first half of 2003 and 6 percent in the second half.
  • Europeans, including Russians, made up 14 percent of buyers in the first quarter, while the Far East and the rest of the world contributed 4 percent and 2 percent, respectively.
  • Most wealthy buyers were British, accounting for 68 percent of buyers.
  • The most favoured addresses were Chester Terrace, some Mayfair streets, and houses on garden squares in Kensington and Chelsea.
  • Knight Frank expected buyer confidence to continue in 2004 as more City bonuses were paid out and employment prospects improved.

Statistics:

  • 2.5 percent - the rise in prices of prime property in London over the year to March 2004.
  • 1.9 percent - the fall in prices of prime property in London over the whole of 2003.
  • 1.3 percent - the rise in prices of properties worth £3m or more in March 2004.
  • 0.5 percent - the rise in all London prime property in March 2004.
  • 12 percent - the proportion of American buyers in the first quarter of 2004.
  • 14 percent - the proportion of European buyers, including Russians, in the first quarter of 2004.
  • 4 percent - the proportion of Far East buyers in the first quarter of 2004.
  • 2 percent - the proportion of buyers from the rest of the world in the first quarter of 2004.
  • 68 percent - the proportion of British buyers.
  • 500,000 to £8m - the price range of prime property in London.

Sources:

  • Knight Frank, estate agent.
  • Liam Bailey, head of residential research at Knight Frank.

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