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While many markets continue to plod along, bouncing and churning in the bubbles of a partial recovery, primary central London prices are surging again, conjuring images of the boom years.
After a 1.4 percent bump in May—the 14th consecutive monthly increase—prime London prices are up 23 percent since last March, Knight Frank report. That’s only 6.4 percent below the market’s peak, achieved in March 2008.
Overseas buyers are helping lead the surge, the property company says. While U.K. residents have been hesitant to commit, foreign buyers, especially Russians, are taking advantage of the weak pound. The number of Russian applicants grew by 112 percent in the last two months.
"Russian buyers have become very noticeable over the past two months and have bucked the trend set by domestic buyers who became less committed in the run up to the election,” said Liam Bailey, Knight Frank’s head of residential research. “Russians and most other nationalities buying in London are fairly unaffected by political upheaval and have remained by far the most confident and proactive buyers in the market.”
Elena Norton, head of Knight Frank’s Russia desk, says there has been a “clear shift in demand” towards “single family house refurbishments” and larger developments where Russians can be investors or co-developers. “Increasingly they are looking to add value over the longer term, which proves that Russian buyers consider London property a safe and attractive investment,” Norton said.
