£2m Plus London Sales Market Continues To See Exceptional Growth
Strutt & Parker's latest London residential quarterly report shows a total of 834 homes were sold in Prime Central London (PCL) during the first quarter of 2014, which was an 8.3% increase over the quarterly average for the past ten years.
In the first quarter, the sub-£2 million market saw a slight dip (most likely due to the late Easter holiday) – whilst the market over £2 million didn't seem to be affected with buyers continuing to pour in seeking security in bricks and mortar as geopolitical concerns picked up.
Stephanie McMahon, Head of Research, said: “Although the Sub £2m market stalled this quarter, the £2 -5m and £5m plus have seen exceptional growth both in values and volumes compared to the same period last year. We have seen a dramatic 47.2% increase in the value of homes sold during the first quarter compared to the quarterly average for the past ten years.”
Chelsea, South Kensington & Fulham have seen the greatest quarterly value of properties sold since 2001. When looking at the quarterly averages for the past ten years, Chelsea, South Kensington & Fulham saw a 65% increase in values, with a 17% increase on the number of properties sold. Kensington & Notting Hill also performed strongly, whilst Knightsbridge & Belgravia surprisingly saw a slight dip with a 1.1% decrease in value of transactions, and a 26.7% decrease on the number of homes sold.
Lettings slowed down slightly on last year with 2,912 lets agreed, representing a 2.2% decrease. One reason for this could be that tenants who secured good rental levels a year ago have seen no motivation to relocate to new properties with potentially higher rates. There has also been a reduction in corporate rentals likely due to larger companies evaluating internal viability. One area of the market booming was houses in Chelsea - there was a significant increase of 6.6% in houses let in Chelsea, South Kensington & Fulham compared to the first quarter of 2013.
Zoe Rose, Head of London Lettings, said: “The rental landscape in Chelsea is changing fast and we have seen a sharp increase in buy-to-let investors over the past two years.”
Strutt & Parker expects PCL prices to continue to rise by around 6.5% in 2014, but for them to drop back to 2% growth in 2015 as political uncertainty emerges ahead of the General Election. These forecasts are a stark contrast to 2010 and 2011 when PCL house prices surged by over 13% year-on-year.
Andrew Scott, Head of London Residential, comments: “Back in the mid-80s I was asked, 'When will the boom end?'. That was when a £10m house today was worth £450,000. Right now it feels like it will never end as we continue to see 15% plus annual growth rates.
Nearly 45% of all Strutt & Parker buyers in central London in the first quarter of 2014 were originally from overseas. Comparing this quarter to the first quarter of 2013 there was a 31.4% increase in buyers from Asia (highest in the Knightsbridge and Belgravia area) and a 20.8% decrease in buyers from the Middle East.
The report defines PCL as Chelsea, Kensington, Fulham, Notting Hill, Knightsbridge and Belgravia.
Press release distributed by Pressat on behalf of Pressat, on Tuesday 29 April, 2014. For more information visit http://www.pressat.co.uk/
Strutt & Parker' Construction & Property
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