The performance of an individual property will depend on many different factors, such as location, property type and size, rarity of product, quality of finish and price band amongst others.

These factors combined determine whether a property is attractive to the deepest and strongest strands of demand and how it is judged, and therefore priced, relative to competing stock on the market.

Houses in Prime Central London have substantially outperformed, with average price growth of 92% in the six-years to June 2011. This compares to an average price growth of 69% across all residential sales in the boroughs of Kensington & Chelsea and City of Westminster, as recorded by the Land Registry.

While average growth for prime flats is much more in line with the market as a whole at 84%, there are clear sectors of the flats market that have performed particularly strongly.

By studying the distribution of the properties in the top and bottom 25% of our sample, we can build an understanding of what has separated the best and worst performing.

Mayfair elevation

The top performer over the past six years has been Mayfair, where average prices have risen by 117%, such that it is now competing with some of the highest value locations in central London. This is followed by Marylebone at 107%, which remains a slightly less mature market.

Mayfair in particular has seen a significant level of new capital investment and, on the back of improved amenities for residents, has the greatest share of properties within the top performing quartile of our sample.

Market understanding

By contrast, lowest placed St John’s Wood saw average values rise by only 69% in the six-year period and has 56% of its properties in the bottom performing quartile of our sample. This suggests an area with a greater mix of property grades, and one with potentially greater scope for growth over the next few years.

Click the links below for detailed analyses of the best performers and slow burners.

Over the past six years the depth and nature of demand have dictated how different properties have performed in a volatile market. Stock selection has been key to value growth in a given location. All indications are that this will continue to be the case.

Taken from:
Spotlight: Prime Central London Residential, 2005 to 2011