The repot found that high-profile new developments are re-shaping the UK’s prime property market, driving up the number of sales and investment into locations previously overlooked.
While areas renowned for high value property markets (prime property hotspots) such as Kensington and Chelsea, Mayfair and Knightsbridge are still holding strong, the report reveals there is a diversification in the market towards East and South London, Manchester and Cambridge.
Ryan Tholet, Head of Investec Private Bank, stated that: “The combination of value and location is what makes a property ‘prime’ and it is clear that the new builds which are driving the expansion of the UK prime property market overlap with areas that we have identified as experiencing, or due to experience, high levels of investment – from developments such as Crossrail, for example. For High Net Worth (HNW) individuals looking to diversify investments or expand their property portfolios, keeping an eye on new build growth will give them the edge.”
London’s prime property market is moving outwards with prime new build developments placing areas such as Tower Hamlets (where 60% of prime sales were new builds), Newham (where 56% of prime sales were new builds) and Southwark (where 38% of prime sales were new builds) on the prime property map. In particular, Tower Hamlets is on track to become London’s largest deliverer of new housing with the Poplar Riverside Housing Zone projected to create 6,000 to 9,000 new properties by 2020.
In the South East, South Bucks remains popular due to the eager anticipation of Crossrail, in addition to areas such as Broxbourne. An up-and-coming commuter hotspot, new builds consisted of 41% of prime property sales in the borough. Further afield, prime new builds, high-demand and a burgeoning tech industry continues to fuel prime property sales in Cambridge.
Meanwhile, Greater Manchester’s prime property renaissance continues with demand for properties in Trafford leading to a 22% increase in the value of its prime property market, worth over £200m by the end of 2017. According to Investec Private Bank’s recent survey of HNWs, respondents would be more likely to purchase a prime property in Manchester than in London.
Ryan Tholet, Head of Investec Private Bank, added: “HNW investors recognise that the boundaries of prime property hotspots are becoming ever more elastic, with 68% stating that “buying in a trendy area has become more important than ten years ago”, and it is fascinating to see this realised in the strong market growth we are seeing in areas such as Manchester, with strong business development driving foreign as well as domestic investment. However, it is also encouraging to see London’s traditional prime property market show little sign of bottoming out.
The boroughs of Westminster and Kensington & Chelsea alone, for example, contributed £8.2 billion, of the England and Wales total of £32 billion, in property sales in 2017 alone. In the long-term we will be keeping an eye on how factors such as prime new builds impact the fundamental dynamics in the prime property market.”
