The value of property in central hotspots including areas such as Chelsea and Kensington has risen by 9.3% in the past year and by 3.4% in the last quarter.
Increased demand at a time of an acute shortage of stock is pushing prices higher. During the last quarter, 11% more buyers entered the market in competition for 14% fewer properties.
While transactions across Prime London as a whole increased by 40% during the last quarter, the volume of transactions in central areas reduced by 38%.
Peter Rollings, CEO of Marsh & Parsons, comments:
“It’s true that the imbalance of supply and demand is pushing property prices higher in Prime London areas. But it’s also creating an excellent time to sell property. Helped by the rapidly improving availability of mortgages, buyers are queuing up for the chance to buy a Prime London home. Property is changing hands in record time and for close to the asking price, with 98% of the asking price for Prime London property regularly being achieved.”
Despite the introduction of the 7% stamp duty tax, the number of properties worth £2m or more has continued to increase. Over a third (38%) of Prime Central London properties are now worth £2m – and in Prime London as a whole, almost a quarter (24.6%) of homes fall into this category.
The price increases are particularly pronounced in properties which were worth more than £3m in January 2010. At the beginning of 2010, the average price of a property in this category was £4,509,739. The average current price for properties in this category is now £5,481,884 – an increase of 20% in just 3.5 years.
In terms of property types, the property group which experienced the largest growth spurt last quarter were two-bedroom properties in Prime London – with a 6% value increase compared to the previous three months. The slowest movers were one-bedroom properties in Prime Central London, which increased in value by a relatively modest 1% in the three months to June.
Peter Rollings continued:
“Two-bedroom properties in Prime London offer substantially better value for money than smaller properties in the most central areas. Many first-time buyers flock to the village atmospheres of South and South West London in search of a place to lay down roots.
“During the current economic climate, many buyers are looking for longer-term investments, so larger properties in less central areas are becoming an increasingly attractive prospect.”
