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Figure 1: 12 month % change, high-value properties and UK average house price

Source: Knight Frank prime central London Index, Nationwide House Price Index

In the 2010-2012 period, prices of high-value properties increased at rates above the increase in average

UK house price. One of the factors impacting this above-average growth is a sharp rise in demand. In the

aftermath of the crisis in US financial markets and the collapse of Lehman Brothers, investors were

seeking to buy prime London property as a safe haven investment. Additionally, during this period

foreign buyers accounted for a larger share of prime London property than they do today


, as the

comparatively weak pound made property investment in the UK attractive. Uncertainty surrounding the

Eurozone crisis during this period also drove more European buyers to seek property in the UK, especially


In the 12 months Sep 2012-Sep 2013, prices of high-value property contracted by 2.5%, compared to a

3.8% increase in UK average house price. In the 12 months Sep 2013-Sep 2014, average UK house prices

also grew more than prices of high-value properties. The same is true for nearly every month in 2014.

2 Based on Knight Frank’s

Residential Research Report

in 2014 UK buyers accounted for 53% of the super prime market, up from 36% in 2013, and 27% in 2012







Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14

High-value properties

UK average

© Centre for Economics and Business Research