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Capital's prime property sector stays sturdy
14 May 2008 11:30
Central London's luxury property market should remain comparatively robust despite the credit crunch, a firm providing professional services for investors in the area has claimed.
London Central Portfolio's chief executive Naomi Heaton conceded that cuts in city bonuses and potential job losses would push down prime property sales volumes and to a lesser extent prices, but insisted that this effect should not be overestimated.
She explained that these houses are usually held by long-term owners with low loan-to-value mortgages that are almost paid off, meaning that repossessions and distressed sales are rare and prices are therefore not kept down by the flooding of stock onto the market.
Ms Heaton also pointed to the prime central London sector's 'self-regulating' nature, as falling sales and increases in renting force up yields and put pressure on the market, which encourages investors to return and thereby stimulates long-term capital growth.
Recent data from Halifax indicates that there were 4,407 million-pound property sales in London last year, up by 25 per cent on 2006, including 961 in Kensington and Chelsea, 694 in Westminster and 334 in Hammersmith and Fulham.
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