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Cheap mortgage needed for London prices

Date: Mon, 05 Jun 2006

Mortgages to purchase central London properties are rising by around 20 per cent.

Estate agent Frank Knight estimates that properties in Chelsea are 19.5 per cent higher than at the start of the year and buyers are being encouraged to shop around for the best cheap mortgage deal to help secure that central home.

It is estimated that the highest mortgage rates in London are now 16.6 per cent higher than in 2005 – the highest annual increase since 2000.

Many property analysts believe that the prime areas of London, such as Chelsea and Kensington, are crucial in predicting the future movement of the UK housing market.

Liam Bailey, Knight Frank's head of residential research, explained: "We have seen two clear trends in the market since the start of the year – firstly 'uber prime' areas have led the market and secondly the massive rise in price experienced at the very top of the market has now eased and growth is now driven by the £1 million to £2 million price bracket."

He added: "The second trend is important as it might just signal the beginning of the end of the London boom. Just as London trends lead the UK housing market, trends in prime central London lead the wider London market."


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