Our latest Market in Minutes Prime London Residential Markets publication compares the performance of prime London markets. Download here.
The mainly domestic markets of south west and north London, rather than the much more international markets of central London, have been the predominant driver of house price growth across the prime markets of London in the past year.
While prime central London (PCL) house prices continue to show steady year on year growth of 5.6% and quarterly growth of 1.9%, the prime markets of south west London have recorded double digit annual rises and price growth of 4.0% in the third quarter of 2013. These markets are now on average 28.1% above their 2007 peak, just behind PCL at 30.1%.
The strong price growth in London’s prime markets is often attributed to the influx of overseas money and while that has been the case previously, the strongest price growth in the capital is now being driven by needs-based equity-rich buyers who are resident in London full time.
The outperformance of these markets reflects three key drivers: wealth displaced out of central London, the recycling of significant housing wealth within parts of south west and north London and more household wealth being allocated to housing in these areas.
Less accentuated but nonetheless robust price growth has also been seen in other locations that have historically lagged central London, such as Islington and Wapping.
Across all prime London, properties valued in the £1m to £1.5m bracket – somewhat below the 7% stamp duty threshold have performed particularly strongly. By contrast, year on year growth in the £10m+ central London sub-market is just 1.8%; as prices appearing to have broadly plateaued at 38% above their 2007 levels.
However, transactions in the super prime markets have remained robust. In the past year, there have been over 460 transactions over £5m and 160 transactions over £10m up 20% and 32% on the preceding 12 months respectively.
