LUXURY house prices in central London will put in a spectacular rally of nearly 40 per cent in the next five years, according to the latest forecast by Knight Frank.<br /><br />The estate agent said prime London properties, worth over £1m, will sidestep a nationwide fall in house prices next year and grow at three per cent.<br /><br />They will then put in a nine per cent gain in 2011, adding to overall growth of 38 per cent by 2014, it said. “We believe that the future improvement in market conditions will continue to be led from London and southern England, particularly from the higher price brackets,” said Knight Frank’s head of residential research Liam Bailey. <br /><br />“The economic prospects in central London are brightening more rapidly than elsewhere in the UK.” <br /><br />The UK as a whole, however, will put in an overall gain in 2009 of just two per cent before declining by three per cent in 2010 under a “W-shaped” recovery. <br /><br />“A weak economy will feed through to lower household wealth and both the ability and willingness to bid up house prices,” Bailey said. <br /><br />But there will be recovery across the UK in the longer-term, he said, with the nation expected to see 19 per cent growth overall over the next five years.<br /><br />He said land prices are set to rise, with farmland prices doubling to £10,000 per acre by 2015.<br /><br />“A lack of farmland for sale coupled with strong demand will continue to push up prices,” he added.<br /><br />More evidence of a rally in housing prices came yesterday with official government figures saying UK prices rose 2.6 per cent in the quarter to end-August.<br /><br />The figures from the Department for Communities and Local Government (DCLG) said house prices rose by 0.5 per cent in August.