London Luxury Homes Average Value Surpasses 2 Million Pounds

(Bloomberg) The average value of luxury homes in central London exceeded 2 million pounds ($3 million) for the first time in the second quarter as more purchasers competed for a smaller number of properties on the market, Marsh & Parsons Ltd. said.

Home values in prime locations from Chelsea to Kensington rose 9.3 percent in the 12 months through June, the London-based property broker said in a report today. The number of buyers seeking homes in the most expensive districts climbed 11 percent from three months earlier, while residences available for sale declined by 14 percent.

“The imbalance of supply and demand is pushing property prices higher in prime London areas,” Chief Executive Officer Peter Rollings said in a statement. “Property is changing hands in record time and for close to the asking price.”

Investors from overseas are buying London real estate to preserve wealth amid political and economic tension in their home markets, causing prices to rise more than most brokers expected. Knight Frank LLP, along with Jones Lang LaSalle Inc. (JLL) and Savills Plc (SVS), last year forecast that prices would be little changed in 2013 after an 8.7 percent increase in 2012.

Bloomberg reports that about 38 percent of prime central London properties are valued at or more than 2 million pounds, Marsh & Parsons estimates. The company looked at properties located in the Chelsea, Kensington, Notting Hill, Holland Park and Pimlico neighborhoods to collect data on prime central London prices. Prime London includes those areas as well as the Clapham, Balham, Battersea, Barnes, Little Venice and Brook Green districts, according to the report.