Prime central London house price growth at its lowest in five years thanks to China and stamp duty

Emma Haslett
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Homes in "traditionally" upmarket areas such as Notting Hill's Portobello Road rose just 0.4 per cent (Source: Getty)

Prices of homes in some of London's most exclusive areas grew at their lowest in more than five years in August, new figures have suggested.

The Prime Central London Sales Index, by upmarket estate agent Knight Frank, has found annual house price growth dropped to 1.7 per cent in August, the lowest rate since November 2009, thanks to stamp duty, as well as uncertainty and currency fluctuations in China.

But stripping out "new" prime central London areas such as Islington, Riverside, City & Fringe and the Southbank, that growth dipped even further, to just 0.4 per cent.

Meanwhile, transactions in London's poshest areas were down 20 per cent on last year in the three months between May and July - although that's lower than the 48 per cent drop on the year before, during the previous three months.

The study showed annual growth in traditional areas had stabilised (Source: Knight Frank)

The report put some of the drop down to seasonal factors.

"The seasonal nature of the market dictates buyers will become more active in the autumn and a greater sense of normality will return to the market, which will also be driven by the fact vendors are lining up new properties for sale," said Tom Bill, head of London residential research at Knight Frank.

The study also suggested uncertainty over China was misplaced.

"Questions over the spending power of Chinese buyers in international property markets like London should be seen in the light of the [Yuan's] longer-term performance," it said.

"Though [it] weakened against Sterling in August, it remains weaker than it was 12 months ago."

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