Property prices in prime central London continued to rise in July and have increased by 4.2% in the first seven months of the year. The further weakening in sterling in the first half of 2013 has helped to boost overseas interest and domestic demand has been aided by London’s economic recovery and also to a more limited degree by Government policy.
In light of this ongoing price growth, our forecast for prime central London price growth has been raised to 6% for 2013.
Rents in prime central London, meanwhile, declined again in July. The annual decline in rents across the capital’s best postcodes now stands at 2.7%. Our view remains that it will be 2014 before we see more robust rental growth, however this will require the improvement in central London job creation to be sustained.