Mapping the expansion of prime London from 2003 to 2018.
To map the expansion of prime London, we used Land Registry data to plot every sale at £1 million and over. Starting in 2003, we are able to see the established prime locations spread and new prime locations appear.
The animated map below shows the expansion of 'prime' London from 2003 to its predicted state in 2018.
In 2003, the prime markets were mostly confined to core PCL, spanning from Kensington/Notting Hill in the west to Mayfair in the East and Chelsea to the south. St John’s Wood and Hampstead to the north west of PCL were also established prime locations. On the map we have also highlighted the relatively low number of locations beyond the centre where £1m+ sales were happening in significant numbers.
New build property accounted for 10.4% of all £1 million+ sales, the highest proportion of all the years we have looked at. Development activity is mostly confined to the edge of the established locations such as Kings Chelsea on the edge of Fulham and Balmoral House near Paddington. Riverside regeneration is already underway with key developments such as Albion Riverside, The Bridge and St George’s Wharf.
Although the country was in recession in 2008 and house prices in London were falling, the number of £1 million+ sales increased over the five years from 2003 by 55%, reflecting the expansion of the prime market in the period 2005-08. As is always the case during a downturn, new build activity slowed significantly, accounting for just 4.5% of all £1 million+ sales. On the map we have highlighted the new areas of prime which were emerging in 2008.
Many of these newly prime areas are the obvious expansions such as Brook Green from neighbouring Holland Park and Pimlico across the railway from Belgravia. Others have emerged as new build development opened new areas of prime. Canary Wharf had just a few new build sales over £1 million+ five years previously but now many of these older new build properties are selling for £1 million+.
Since the downturn, London’s housing market has led the recovery, particularly in the prime locations. Demand for property in the capital has soared and with it has the number of £1 million+ sales, increasing by 165% over the five years to 2013. Popular locations in East London, such as Dalston, are beginning to break the £1 million barrier as are an increasing number of locations in the South East, such as Streatham and Herne Hill.
Development activity in the prime markets has picked up significantly with nearly four times as many new build £1 million+ sales than in 2008. This is particularly evident in the City with popular developments such as The Heron, Arthouse, Wardour Street and Sterling Mansions seeing high levels of demand from both international and, increasingly, domestic buyers.
Over the next five years (2014 to 2018) we are forecasting that all prime London property will see price rises of 23%. Using this forecast, we have mapped all the properties which sold in 2013 that will be over £1 million by 2018 as an indication of where the next prime locations will be.
This method indicates that the rate of expansion in prime London will slow slightly in comparison to the previous five years. Still, £1 million+ transaction volumes are expected to rise significantly, by 47% over the next five years.
The majority of the new locations are neighbouring areas to those that are already prime, such as Earlsfield and Brixton. Both Wanstead and Southgate are expected to appear as new prime locations in outer London as values here reach the £1 million mark.
The map now shows the emergence of a third ‘wealth corridor’ as and when homeowners move out of the centre of London. The south west path has long been established, but the route north only became visible in 2008 and filled in over the next five years.
The next wealth corridor running south east brings in Dulwich and Bromley, which become more connected via locations such as Crystal Palace and Shortlands.
Inevitably, there will be other locations that emerge as prime, either by becoming more fashionable for wealthy younger households or via regeneration.
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