Press Release: Value of three-bedroom properties in Prime London rises by 729 PER DAY in the last year
Tue 29 Apr 2014
(Equivalent to a quarter of a million pounds in just twelve months)
- Three-bedroom properties in Prime London have appreciated by 19% in the last year, to an average current price of 1,670,339
- Prime London property overall has risen by 4.3% in the last quarter, and 12.9% in the last year
- If prices were to continue to rise at the current rate of 4.3% per quarter, the average price of a Prime London property would exceed 2m by 2016
- Huge surge in UK buyers in the last quarter, indicates that high price rises are not just fuelled by overseas money
The average value of three-bedroom properties in Prime London has risen by over 700 per day, following a 19% annual growth, according to estate agent Marsh & Parsons latest London Property Monitor.
This is equivalent to more than a quarter of a million pounds in the last year (266,246) or 5,120 per week and means that three-bedroom property owners in Prime London are earning almost eight times the median salary for London, currently estimated to be 658 per week, in capital gains.
A large part of this increase was gained in the last three months, after a strong 6% quarterly rise increased the average value of three-bedroom properties by an extra 93,231. This follows three strong quarters of growth in the past year, contributing to a 19% annual growth equivalent to 266,246 in a year.
Three-bedroom properties have risen in value at a faster rate than properties of other sizes in Prime London. The overall rate of growth in Prime London, reflecting all sizes of property combined, was 4.3% in the past quarter and 12.9% in the past year.
Peter Rollings, CEO of Marsh & Parsons, comments: "These are extraordinary times for the Prime London property market. Smart buyers can earn more money from their house in a year than by going to work in a very well-paid job. With returns like these, its easy to see why people are queuing up to buy Prime London property.
"Its always difficult to call the top of the market. But while comparisons are being drawn with 2007, the current conditions are actually remarkably different. Its difficult to see how prices can fall while demand for property remains so high. Compared to the same point last year, we have seen a 20% increase in demand and a 25% fall in the supply of property. Prime London is still a strong sellers market and jackpot prices are fast becoming the norm."
Typical three-bedroom properties in Prime London:
Three-bedroom flat in South Kensington - 1,650,000
Three-bedroom house in Fulham - 1,675,000
Property Type Breakdown
|All Prime London||Prime Central London||Outer Prime London|
Across Prime London as a whole, the average value of property has appreciated by 4.3% in the last quarter and by 12.9% in the last year, to a current average price of 1,541,652. If prices continue to rise by 4.3% per quarter, the average price of Prime London property would exceed 2m by the end of next year.
The areas of Prime London which have experienced the fastest rate of growth in the last quarter were the Outer Prime villages of Balham, Clapham and Brook Green. In the last year, the average price of property in these areas has increased by 26%, 25% and 17% respectively.
Peter Rollings continued: Its staggering to think that the average price of a property in Prime London could be more than 2m by the end of next year. But while this is possible, experience tells us that the majority of house price growth usually falls in the first half of the year, so the actual rate of growth over the next year is likely to stabilise towards the end.
So far this year, the highest levels of growth have been recorded in areas of South West London, such as Balham and Clapham, where demand for property is intense. These are fast becoming hotspots for young families and first time buyers eager to get onto the property ladder. The popularity of these areas also reflects the more affordable price bracket - the average price of property in Outer Prime London is around half that in the more central areas.
Prime London Property Price Movements
|Average Value||Quarterly Change||Annual Change|
|Prime Central London||2,192,849||4.0%||11.9%|
|Outer Prime London||1,134,653||4.7%||14.1%|
In the last quarter, there has been a huge surge in the number of UK buyers purchasing Prime London property, and a marked decrease in the number of overseas and foreign nationality buyers. UK buyers made up 78% of all Prime London purchases in the three months to April.
In Prime Central London, which includes the areas of Kensington & Chelsea and is typically a stronghold for overseas buyers, the proportion of purchases by overseas and foreign nationality buyers has fallen to a two-year low, with just over a fifth (21%) of purchases made by this group in the last quarter. This is considerably less than the medium term average during 2012 and 2013, overseas and foreign nationality buyers accounted for around 40% of all purchases.
Peter Rollings continued: These figures show that, contrary to popular belief, the Prime London property market isnt just being fuelled by overseas money. Increased legislation aimed at foreign investors is causing widespread uncertainty across the market and threatens to blemish the UKs reputation as being open for international business. But the reality is that, until other forms of investment become more attractive, Prime London property will continue to be seen as a rock solid investment, akin to a global reserve currency. With the changes to pension funds announced in the Budget, we may continue to see an increase in UK buyers and pension fund investors operating in the capital, in search of rental yields and long-term capital growth.
The Prime Market Monitor uses a repeat valuation methodology that tracks values in a robust and representative mix-adjusted basket of properties across Prime London in the main areas in which Marsh & Parsons operates. Prime Central London comprises representative baskets of properties covering Chelsea, Kensington, Notting Hill, Holland Park and Pimlico. Outer Prime London comprises areas such as Clapham, Balham, Battersea, Barnes, Little Venice, Fulham and Brook Green. Prime London describes all these areas combined including Prime Central London and Outer Prime London.
Supply and demand statistics are based on an audit of Marsh & Parsons registrations and instructions during the quarter. Buyer profile information is taken from Marsh & Parsons quarterly MI data.
For further information please contact:
The Wriglesworth Consultancy: Julia Langsman / Neil Mackwood 0207 427 1441 / 0207 427 1400
Marsh & Parsons, a multi-award winning estate agent, has been part of the London property scene since 1856. With 20 offices situated in prime positions across central, west and south west London, they have an intimate and extensive knowledge of the area. Marsh & Parsons services include residential sales and lettings, property management, new homes, developments & investments, professional surveying and corporate & relocation services.
Marsh & Parsons was acquired by LSL Property Services plc in November 2011, but continues to operate as a separate business, retaining its current management team.
A business that is built on energy, agility, professionalism and knowledge, Marsh & Parsons business aim is to be the agent who not only understands the local area around their offices better than any other agent, but is also at the heart of the community. They believe that Local know-how will achieve better results and make the difference for their clients.