WHY ARE PROPERTY VALUES IN CENTRAL LONDON RISING FASTER THAN REST OF THE UK?
Prices in Prime Central London are indeed out-performing the rest of the country. Over the last 12 months, average house prices across the UK have remained broadly stable, meanwhile in Prime Central London (PCL), prices rose by 12.1 per cent in 2011. There are many reasons for this, but one of the key factors is that bricks and mortar in PCL is seen as safe haven, both for domestic and international buyers.
WHAT DOES PRIME ACTUALLY MEAN?
There is no dictionary definition of prime, but usually, in more established prime areas, such as Knightsbridge, Mayfair and Chelsea, it means there are a high volume of properties worth more than £2m. For more development-led prime areas, such as the Southbank, the City and the City Fringe, it means that properties are regularly achieving over £1,000 per square foot. Usually we find that these prime areas have common factors as well as being centrally located. These are fantastic retail outlets, good transport links and high levels of top-end housing stock.
ARE OVERSEAS BUYERS SNAPPING UP ALL THE HOMES?
No, but they are certainly an important market. Around 53 per cent of sales in PCL are to buyers from overseas, and there was increased interest from Greek and Italian buyers late last year. Greek buyers invested £276m in Prime London property last year, while Italians spent £377m.
WHAT ABOUT RENTS?
Rents in the prime central London area have also risen strongly over the last year and are higher than they were during the previous peak in 2008. As with the rest of the UK, there has been increased demand for rental property as transactions eased. But for those wondering how high rents can actually go, there has been a respite, as prime central London rents have slipped over the last three months, the first falls seen since 2009. They are still 6.7 per cent higher year on year however.
WILL THE CRISIS IN THE EUROZONE AFFECT THE MARKET IN LONDON?
The Eurozone crisis is certainly casting a shadow over the UK, and global, economy. There is no doubt that the UK’s economic growth rate will be affected if the Eurozone crisis deepens further or if the Eurozone breaks up. This will have a knock-on effect on all areas of the housing market. But there is an argument that prime central London property would still be seen as a safe haven amid very uncertain times in Europe.
However our central forecasts are based on the Eurozone weathering the storm and remaining united.
WHERE IS THE BEST PLACE TO BUY IF MONEY IS NO OBJECT?
It really depends on what your priorities are. For some buyers, being close to their children’s school or university will be paramount, some will want to live in a building with iconic architecture and top- end service, while others may want to start from scratch in an untouched townhouse. But a major factor to bear in mind is security. In this respect Kensington Palace Gardens fits the bill, as do some of the recently developed buildings in the capital.
WHERE IS THE BEST PLACE TO BUY IF MONEY IS AN OBJECT?
Look for locations on the edge of prime or where future infrastructure investment will pull your location into a more desirable bracket – so property within walking distance of Crossrail stations, for instance Aldgate and Farringdon are interesting to consider.
IS IT TRUE THAT BEING NEAR A GOOD RESTAURANT CAN ADD VALUE TO A HOME?
We recently did some research across the UK focusing on Michelin-starred restaurants and found that house prices close to some of the best restaurants, such as the Fat Duck and Whately Manor have climbed by twice as much as other properties in the wider locality. In London most people are surrounded by good bars and restaurants. This certainly is part of the attraction of living in London, and why many are willing to pay a premium to do so.