• Prices in prime Central London rose by 2.3% during Q1
• Average price of a flat breached £1 million mark for the first time
• Average price for prime residential property reached new historic high of £1.53m
• Prices expected to rise by 22% over next five years
Home owners in prime Central London are currently benefitting from price growth of £383 per day, the equivalent of a return air fare to New York City or Dubai, reports property consultant Cluttons in its Residential Investment Monitor Q1 2013, published today.
Following a slowdown in both the sales and lettings markets during Q4 2012, the prime Central London residential market has turned a corner, with positive growth recorded across all London regions. Values rose by 2.3% during the first quarter, taking the annualised increase to 6.8%, just ahead of the long run average of 6.7% per annum.
Consequently, the average price of a flat in prime Central London breached the £1 million mark for the first time, while the average price for prime residential property as a whole reached a new historic high of £1.53 million in Q1, leaving prices 6.1% above the previous market peak of Q3 2007. This translates to an average increase of £383 per day.
The best performing London region was Central North West, incorporating St John’s Wood, Hampstead, Maida Vale, Regent’s Park and Highbury & Islington, which showed price growth of 4.5%, pushing values above the £1.5 million mark for the first time. Central West on the other hand, incorporating Hyde Park, Notting Hill, Kensington, Holland Park, Mayfair, Paddington and Marylebone saw the smallest increase of 1% over the quarter, which pushed average prices to £2.36 million.
Sue Foxley, Head of Research at Cluttons, said: “Prime Central London is once again experiencing robust price growth, driven primarily by the supply drought and strong domestic demand, aided by a greater take up of the historically low mortgage rates. To access property while also securing long term capital value growth, buyers are looking to the edge of core locations with good transport links such as Clapham, Highbury and Canary Wharf, which in turn are benefitting from upward pressure on prices.
“The prime London market appears to have successfully withstood the worst of the economic turbulence and continues to outperform the rest of the UK, albeit with relatively subdued levels of growth when compared to the years leading up to the recession.”
Prime Central London house prices are expected to rise by 22% over the next five years according to Cluttons’ forecasts.