Prime central London residential property prices rose by 0.4
per cent in June, up 3.7 per cent in the year to date and now 60 per cent
higher than the market nadir of March 2009, although the most expensive real
estate lagged in performance terms, partly due to new taxes, according to
Knight Frank.

Over the past 12 months, luxury properties in the UK capital –
still a big draw for international investors seeking a safe haven and potential
capital growth – have risen in price by 6.9 per cent, the global estate agency
said.

A more detailed examination of the data shows that there are
wide variations in terms of price performance depending on the value of a
property. While prices have risen across all price brackets in 2013, at the lower end of
the market (sub-£1 million), properties have seen an increase of 6.6 per cent
over the year to date. Annual price growth for sub-£1 million ($1.52 million) properties
stands at 12.1 per cent, well above the overall prime central London average gain of 6.9 per cent, the firm
noted.

In the £1 million-£2.5 million price bracket, properties have
increased in value by 5.4 per cent in 2013 and by 8.5 per cent over the last 12
months.

“Price growth for properties in the higher price brackets
has been more muted in comparison,” Knight Frank said.

Homes priced at £10 million and above have risen by 1.5 per
cent over the year to date and are 4.5 per cent higher annually, although
activity levels remain healthy. “The higher stamp duty charge for £2 million-plus properties,
introduced at last year’s [UK]
Budget, remains a key driver behind stronger growth from the lower price
brackets,” Knight Frank added.