London's 'safe haven' status is continuing to attract a higher number of homebuyers from across the world, which is placing greater pressure on the city's acute housing supply crisis, pushing property prices higher in the process.

1. Prime Central London Property Prices Continue to Rise
London’s ‘safe haven’ status is continuing to attract a higher number of homebuyers
from across the world, which is placing greater pressure on the city’s acute housing
supply crisis, pushing property prices higher in the process.
The situation is most acute in the heart of the capital, with the average price of a home
in central London now 13 per cent above the previous market peak in early 2008,
according to Knight Frank. This reflects high buyer demand coupled with a severe
shortage of property for sale in Marylebone, Mayfair, Kensington and Fitzrovia, amongst
other sought-after areas.
“London still remains a key destination for investors looking for ‘safe-haven’ assets, a
fact reflected in the continued rise in interest from prospective buyers, up 23% in the
three months to July compared to the previous quarter,” said Liam Bailey of Knight
Frank.
Increasing the supply of new build properties is central to dealing with some of the
major problems facing the housing system; government has a critical role to play in
enabling home builders to meet the country's housing need, particularly in central
London.

2. For example, any house hunter searching for a house for sale in Mayfair or a flat for sale
in Fitzrovia will find that there is very little stock on the market and this is underpinning
prices in central London.
Jennet Siebrits, Head of Residential Research at CBRE, said: “London is still a bright spot
in the UK residential market with a lack of supply and strong interest from international
buyers looking for a safe haven for their money underpinning house prices."
A recent report compiled by property consultants CBRE shows that over the last decade
London's population has grown by 850,000 whilst only 197,000 new homes have been
constructed in London over the same period.
Reflecting on the growing supply-demand imbalance in the capital. Andrew Ellinas,
Director of leading central London estate agents Sandfords, said: “The property market
in central London is continuing to motor away from the rest of the UK.”
The rise in property prices is also rippling out to leading secondary locations, such as St
John's Wood.

3. Located a short walk from Baker Street, St Johns Wood is considered to be one of the
most popular neighbourhoods to live in London. It generally attracts a high level of
demand from homebuyers - reflected by the lack of houses and flats for sale in St Johns
Wood - making it one of the most expensive places to buy property in the UK.
It does not take a property expert to realise that prices in the capital are likely to rise
unless more new homes are built in the foreseeable future.
The latest Housing Market Sentiment Survey from Zoopla.co.uk reveals that 63 per cent
of homeowners expect house prices to rise between now and the end of 2012. This time
last year, only 57% of homeowners expected an increase in property prices in the
second half of the year.
“Homeowners evidently feel that there are some grounds for optimism, despite the
backdrop of slow economic growth and tight mortgage lending," said Nigel Lewis of
Zoopla.co.uk.