Prime Central Location real estate is back in favour with wealthy buyers from both from overseas and the UK. This in turn is buoying prices, despite the fact that there is more choice of property on the market than at any time since early 2008.
Prime Platinum (the top 10% of the market by value) is worth almost a million pounds more, at just under £3.2 million. This is 3.2% more than last month and 6.4% more than a year ago.
Within inner London, the Royal Borough of Kensington & Chelsea saw Prime property values surge by 3.0% this month, and 3.2% over the year, to almost £2.5 million. The trend is even more marked at the very top of the market, where average Prime Platinum prices in the borough are almost £3.6 million. They have risen 3.5% this month alone, and 11.8% since March 2009.
There is strong interest in high value real estate from a variety of sources, with the very wealthy generally not constrained by the repercussions of the ‘credit crunch’ and indeed potentially benefiting from current low interest rates. Those who raise funds against their share portfolios have been able to borrow more on the back of the recent rally in the FTSE.
Overseas buyers are also showing their resounding confidence in the UK over the medium to long term, and indeed in real estate in the capital - notwithstanding concerns expressed over the country’s long term debt ratings and the fiscal measures the next government will need to implement to tackle the UK’s budget deficit.
Indeed, many foreign investors see now as a good time to buy with Sterling relatively weak against most major currencies and the market relatively slow with high levels of stock available. Prime Central London has seen stock levels rise by 63% over the past 12 months and 8% since last month, according to the Primelocation.com Prime Index.
Helped by the strength of upmarket parts of Zone 1, the London prime property market generally also recorded a good performance this month, with a 1.1% increase in Prime property values, the biggest increase for eight months. Prime Platinum surged by 1.3% this month, again the biggest rise for eight months.
Average Prime property values for London as a whole are now just under £1.1 million, and just over £1.6 million for Prime Platinum.
Andrew Smith, Research Director at Primelocation.com, says:
“As the UK draws out of recession, but with the housing market remaining relatively quiet, astute buyers and investors from both abroad and the UK see this as a good time to find the right property, in the right location.
"There is an excellent choice of property on the market - more than we have seen for over two years. Interest rates are low for those who do need to borrow and, with the pound at around $1.50 or €1.10, many overseas buyers see UK real estate as a attractive proposition.
"Many of them are familiar with favoured prime locations in Central London like Kensington and Chelsea, and see them as a good, secure long term investment. That will help build momentum in the prime markets over the coming months.”
