February 2011 | The mood in the central London apartmentmarket is upbeat. Developers are confident, international buyers enthusiastic and domestic demand robust.

Key finding from the report include:

• In early 2011 we have already seen an active and vibrant market place for central London apartments. International demand has been strong and there are still many serious UK buyers. Upward price pressure is already building, particularly on prime schemes, despite a broad easing in price growth late last year.
• Sales prices for new central London apartments increased by 0.3% during Q4 2010.The rise, however, was slower than the 0.7% seen in Q3 and was the third consecutive quarter of slowing price growth (Chart 1). Despite this the central London market is still quite buoyant and is certainly in far better shape than many other parts of the UK housing market where prices are falling. New central London apartment prices increased by 5.0% during 2010.
• A feature of the market, both in the last year and during Q4 2010, has been the out performance of core locations and prime property. Core locations have seen price increases average 5.7% in the past year with some of the best schemes in central London seeing double digit price growth. Outer core areas have experienced average price rises of 4.2% (Chart 2).
• Within both core and outer core areas there have been stronger and poorer performing locations. In core areas the outstanding performers have been the City and CentralWest (Chart 3). In the outer core region, the South West and North areas witnessed the highest price increases. Larger and more expensive apartments have also performed better (Chart 4).
• International demand, which is particularly important in core locations, has remained strong throughout 2010, including during Q4, and has been supported by aweak pound. Sterling stabilised at around US$1.55 and €1.15 in the latter part of 2010 meaning that central London apartment prices were still around 30% below 2007 peak levels in both dollar and euro terms.
  
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