HOUSE price growth in central London is to slow this month, as even investment bankers begin to be put off by exorbitant prices and higher interest rates.
Research by Knight Frank, the estate agents, due to be released on Friday, claims that, although property prices in central London increased by 3.1% in June, the highest monthly rate of growth since 1976, July will see “much slower” growth.
By December, house price growth will also be down to around 25% over the previous 12 months.
Knight Frank will also say the number of people applying to buy property fell by 5.5% in June, which implies that people are waiting until house price growth slows before buying a property, and means that there will be an increased supply of homes on the market in the next few months.
The data also shows the extent to which growth in the higher end of the market has been driving house prices upwards.
Properties priced above £4m had an average price growth of 43% in the 12 months to the end of June while properties priced under £1m – which are more likely to be affected by recent rises in the cost of borrowing – grew by only 1.6%.
Liam Bailey, head of residential research at Knight Frank, said: “London’s continuing ability to attract wealthy people from around the world has detached the super-prime market from the wider marketplace.
“A slowdown at the upper end of the prime market will require a significant economic shock affecting both the London and global economy or government intervention in the form of taxation or changes to the status of non-domicile residents.”
