After a six month lull in house price growth, in aggregate the prime residential markets of London showed much stronger price growth of 2.8% in the three months in the run up to the Budget. Annual price growth of 8.6% means that prices are on average 13% above their peak. (See table 1)
Within the central London market stock has remained constrained, ending the quarter at just over half (54%) of the average levels seen at this time of the year in the preceding nine years.
This is reflected in a continuation of robust transaction levels. Across the market, sales over £5 million were 20% up over the same period last year generating proceeds of some £940 million.
The resulting stock shortages have combined with strong overseas demand to push prices 20% above their 2007 peak and leave annual price growth in double-digit territory. In the first thee months of the year, overseas buyers accounted for 62% of buyers in Central London, a figure which compares to 55% in the first quarter of 2011.
Such stock shortages have served to change the profile of demand in neighbouring Fulham, which increasingly has taken on the characteristics of central London, albeit at a lower price point.
The buyer profile has become progressively more international, particularly in the £2 million plus market and annual price growth stands at over 15%.
Stock has been less constrained in the more domestic markets of South West and North London. Nonetheless as a whole these markets performed similarly strongly in the quarter, as accumulated equity continued to be recycled within these markets.
Though prices were effectively static in the markets of Putney
and Chiswick this was more than offset elsewhere particularly
given strong quarterly performance in the Wandsworth and Hampstead markets.
The East of City markets have been the slowest to recover post-credit crunch; a trend which has continued over both the past quarter and year. On average values are now 3.9% above their peak with
a noticeable spike in transactional activity during the first quarter
of 2012.
Yet, this average figure masks a significant difference in performance between the markets of Canary Wharf and Wapping.
Across the former, which has absorbed significant quantities of new build stock developed in the run up to the credit crunch, prices are 7.1% higher than where they were five years ago.
By contrast in Wapping prices have risen by more than one fifth over the same period reflecting a less elastic stock profile of conversions.
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