London luxury-home gains to halve in 2014

[LONDON] Price increases in London's luxury-home market will almost halve in 2014 as buyers shun neighbourhoods such as Chelsea and Knightsbridge that fuelled a five-year boom, Knight Frank LLP said. A plan to tax overseas buyers' capital gains may also crimp demand.

Prices of houses and apartments in the UK capital's most expensive neighbourhoods will climb 4 per cent next year after a 7.5 per cent jump this year, the London-based broker said in a Dec 21 report. Prices in Chelsea, Mayfair and Knightsbridge in 2013 underperformed the rest of London's best areas for the first time in a decade.

"There are limits to pricing growth in London," Liam Bailey, Knight Frank's global head of research, said by phone.