Press Release: First-time buyers flying through the Prime London property market
Thu 30 Apr 2015
- One in three (29%) Prime London property purchases made by investors in last three months
- But spike in first-time buyers during Q1 2015 means they now also account for 28% of sales
- One-bedroom properties have risen in value by 75 a day over the past year
- Overall, demand for Prime London homes has soared 20% in first quarter of 2015, with 12 buyers to every available property
First-time buyers are almost neck-and-neck with investors in the Prime London property market, according to estate agent Marsh & Parsons latest London Property Monitor.
While investors continue to account for the majority of house purchases made across Prime London, this margin has narrowed significantly after a huge spike in first-time buyer sales in the past three months.
Nearly one in three (29%) Prime London property purchases were made by an investor in the three months to March 2015 falling from 37% at the end of 2014.
At the same time, first-time buyer sales have jumped from just 21% of all purchases last quarter to 28% of activity during Q1 2015. The rise in first-time buyers has caused the number of prime transactions funded by mortgages to jump 17% in the past three months.
Over the past three months, demand for Prime London homes has risen by 20%. As a result, heightened competition for available homes on the market has pushed the ratio of registered buyers per property up from 10 in December 2014 to 12 in March 2014.
Peter Rollings, CEO of Marsh & Parsons, comments: First-time buyers have been riding a wave of fortuitous circumstances recently with almost unheard of mortgage rates, reduced up-front stamp duty costs, and support schemes like the Help to Buy ISA inflating confidence. Combined with a more accessible pace of property price growth so far in 2015, many more have been able to take the plunge into the property market. Prime London property has always been a bastion of investment, but its encouraging to see the drawbridge being lowered for everyday Londoners who live and work in this city.
However, there is, and has always been, some aspirational Prime Central areas that are out of grasp for new buyers, and will remain an investment stronghold. Addresses like Kensington and Chelsea resonate around the world, and will forever entice buyers looking for unparalleled capital returns.
As a result of this strong demand for starter homes, one-bedroom properties in Prime London have seen the biggest increase in value over the past twelve months with average values up 5%, compared to 1.7% annual growth across the market as a whole. This means the price of a typical one-bedroom property in London has risen by 75 a day over the past year.
Similarly, one-bedroom properties are highly sought after as buy-to-let investments, with rents appreciating at the fastest rate of all property types across the capital. The average weekly rent for a one-bedroom property has risen 5.8% year-on-year in more affordable Outer Prime areas of London, popular with young professional renters.
Peter Rollings concludes: With more and more young professionals climbing onto the property ladder, one-bedroom properties have outperformed the market across Prime London. Historically, buyers rated property on the number of bedrooms and a check list of desirable features. But the speed at which the London property market has moved in recent years has shifted the goalposts. Todays Londoners are far more likely to prioritise location, overall square footage and well-thought through living space compromising on that second bedroom accordingly. For the same reason, savvy investors who find the right one-bedroom property have the golden ticket to rental returns.
For further detailed analysis on Prime London house prices, lettings, million pound homes, investors and UK buyers, the Marsh & Parsons Q1 2015 London Property Monitor is available on request.
Peter Rollings, CEO at Marsh & Parsons, is available for interview to discuss the findings. Please contact Emily Barnes on 020 7247 1403 to arrange a media interview.
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, Earls Court 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:
Instinctif Partners - Emily Barnes / Barney McCarthy: 0207 427 1403 / 0207 427 1405
Marsh & Parsons, a multi-award winning estate agent, has been part of the London property scene since 1856. With 24 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.