Substantial Growth Across London as Non-Central Areas Surge Ahead
Thu 25 Apr 2013
Property values in prime areas of London have increased by a substantial 12.8% in the past year, following a rise of 3.6% during the first quarter of 2013, according to estate agent Marsh & Parsons' latest London Property Monitor.
Prime London property prices rose by 12.8% from the previous year. The proportion of London buyers upsizing in central areas rises by 25% from the previous quarter. But it is actually the areas of Non-Central Prime London that have experienced the most dramatic growth, as a relative lack of supply pushes buyers and investors further afield.
The average premium being paid for properties in Prime Central London now stands at just 43% more than the price being paid for the equivalent Prime London property - a 4% drop from the previous year.
But given the increasingly favourable mortgage rates available to those with higher loan-to-value ratios, growth in Prime Central areas is expected to catch up with that of its outer neighbours before long.
Prime London has now been outpacing Prime Central London for the past three quarters, by experiencing consistently higher quarterly growth than its most central parts alone. There has also been a shift outwards for investors who are looking to profit from purchases in the rising areas of Non-Central Prime London, including Battersea - where rents have increased by an average of 6% in the past quarter.
The proportion of purchases by investors in Prime London has increased from 17% to 25% in the last quarter, while those purchasing in Prime Central areas has decreased steadily for the last three quarters to just 7% in Q1 2013.
Peter Rollings, CEO of Marsh & Parsons, comments:
"Homeowners have seen their equity soar as a result of such significant price growth in the past few years. We are now seeing many of those seizing the opportunity to sell at prices that have recovered and in many cases exceeded the highs of 2007, and then re-invest in the same market, taking advantage of the historically low mortgage rates available due to the funding for lending scheme.
The relatively low increase in the value of Prime Central London property - compared to its Non-Central neighbours - means that there's never been a better time to buy in Prime Central London. The enduring appeal of a classic home in a central location will never go out of fashion."
As a result of property price growth, the number of properties in the capital now worth 1m or more has increased dramatically. In March 2013, almost half (46%) of properties in Prime London were million-pound homes - a figure that has risen from 43% in December 2012, and 37% in March 2012.