Prime property prices in prime central London up for first time since Sept 2014
Prime property prices in central London increased slightly, up by 0.8% in the second quarter of 2015, the first rise since September 2014, according to the latest index.
Pimlico has seen the strongest growth in the last year with values up 5% or £66,000 compared with the second quarter of 2014, the data from estate agent Marsh & Parsons.
The second quarter has also seen a 17% rise in demand for property in this sector but at the same time supply increased by only 10% while overall 42% of sales are now made by investors, a rise of 8% year on year.
At the same time, there has been an upswing in foreign buyers who accounted for 34% of all sales in the second quarter of the year, up from 30% in the second quarter of 2014 although then firm says this has much to do with European buyers of all nationalities coming to live and work in London.
Overall property in this sector costs 27% more per square foot than across London as a whole with the average square foot of property in central locations such as Holland Park, Notting Hill or Kensington and Chelsea valued at £1,516, some 27% higher than the capital wide average. In contrast, overall in Prime London, the typical price per square foot stands at £1,192.
‘The excellent capital appreciation and secure nature of property in prestigious central addresses of Kensington, Chelsea and Holland Park have long made them appealing particularly to the investor and it’s encouraging that we’ve seen such a rise recently,’ said Peter Rollings, chief executive officer of Marsh & Parsons.
‘Investors are a good gauge of the overall health of the London market. If there was any cause for concern about the future property market, investors would be upping sticks and moving elsewhere,’ he explained.
‘But that fact they are still putting down roots in the capital shows how fertile current conditions are. While there may not be much action to see at the moment, prices are still growing, and the foundations for fruitful capital returns are strong,’ he added.
He also pointed out that price growth turned a corner and started to improve again with a 0.8% quarterly rise compared to a 0.6% drop in the first quarter of the year. Outer Prime areas of the capital have seen the strongest resurgence in price growth, experiencing 1% growth.
However, house price growth in this sector is still much slower than last year, and on an annual basis, values have dipped across the prime London property market. Rollings said that it is important to place this into a longer term context, and since June 2013 the value of the average prime London home has increased by 12.1%.
In terms of property type, family sized homes have experienced the biggest rise in price with four bed properties across prime London appreciating by 1.3% over the quarter. Also, demand for homes has increased with the number of registered buyers up 17%.
Peter Rollings expects that the London market is likely to play second fiddle to the rest of the country in the coming months, as it has more fine tuning to do at the highest levels to adapt to the changed stamp duty levels.
‘There’s no denying that London has been struck by significant regulatory changes, and given its position at the frontline of the UK’s prime property market, is having to absorb the impact,’ he added.