Positive outlook for London’s prime property market
Prime London residential property price growth exceeded FTSE 100, gold and oil price growth in 2012 and values are set to rise by 3.2% in 2013. The positive outlook from agents and consultants Chesterton Humberts, which has a network of 55 offices across the UK including 28 in London, comes after a challenging year for the real estate market.
It reports that the pipeline of deals is up by 41%, available stock up by 14.7% and sustained buyer demand and limited availability is driving price growth which it predicts to will reach on average 7.3% over the next five years.
The firm’s latest prime London property research reveals a welcome uplift in both sentiment and activity entering 2013. The report shows that prices, stock levels, instructions and viewings all rose in 2012 compared to the previous year and early indicators suggest 2013 will see further improvement in market conditions.
Quote from PropertyCommunity.com : “Cities have typically recorded higher house price growth than the UK average over the past 10 with the majority also outperforming their region, new research shows.”
The Chesterton Humberts prime London residential index recorded capital value growth of 10.4% in 2012, beating gold (+8.3%), FTSE 100 (+5.8%) and oil (+2.5%). Price growth varies between submarkets with Knightsbridge and Belgravia recording the highest quarterly increase of 4.9%, followed by Islington at 2.9% although Chelsea and South Kensington saw values drop by an average of 1% over the last quarter.
‘After what was a tough year in 2012 with the distractions of the extreme weather, the Olympic/Paralympic Games and a stagnating economy, I am cautiously optimistic about prospects for the prime London market in 2013,’ said Nick Barnes, head of research at the firm. ‘A number of key indicators are looking very positive and the success of Circus West has provided further proof of the undoubted high level of demand for prime residential property in London, whether for lifestyle, investment or safe haven reasons,’ he added.
The latest report suggests that the increase in activity is down to a combination of factors, however availability is the key. Buyer interest in the prime London segment is largely stock led and the increase in properties being marketed will have encouraged buyers who had been waiting for greater choice before making enquiries.
The report also says that foreign buyers continue to target London whether for investment or lifestyle reasons or to acquire safe, quality accommodation for their children whilst they study in the capital’s higher education establishments. ‘Whilst overseas appetite is focussed on the traditional prime central areas, there is also demand for quality properties in decentralised locations offering proximity to good local schools and/or easy access into central London,’ said Barnes.
The outlook for 2013 looks encouragingly positive. Chesterton Humberts’ pipeline is significantly busier than at the corresponding point last year and the highest it has been since 2009, while available stock is 14.7% higher. The firm forecasts that prime central London capital values will increase by 3.2% per annum in 2013 and by an average of 7.3% per annum over the next five years.