London Magazine (Web): Value-For-Money postcode boosted by new Victoria development
Wed 02 Sep 2015
Investors are showing no signs of leaving the prime central London property market in spite of having to pay higher levels of stamp duty and a significantly higher purchase price than elsewhere in the capital. Marsh & Parsons' latest London Property Monitor reports that the price of property per sq ft in areas such as Holland Park and Kensington and Chelsea is now valued at 1,516, or 27 per cent more than the capital-wide average of 1,192, and it also suggests that some interesting new hot spots are coming into view.
For the first time since September 2013, Pimlico, in the City of Westminster, comes out top for price growth. Average property prices in the Thomas Cubitt designed white stucco terraced streets have risen in value by a healthy 180 a day or 66,000 overall in the past 12 months, climbing 5 per cent year on year. The average price of a property in the area now stands at 1.36m compared to the 2.05m that prime central buyers have to pay.
Built as a southern extension of neighbouring Belgravia, Pimlico is known for its garden squares and Regency architecture and, due to its proximity to the Houses of Parliament, has always been a popular residential enclave for MPs. According to LonRes/Dataloft, prices range from 350,000 to 10m, with an average of 1,290 per sq ft. So, what is it that's contributing to the area's growing popularity?
"Pimlico offers better value for money than the fearsome prices of its neighbours," says Chris Nicholls from Marsh & Parsons. "There are some exciting new developments in and around Westminster and Victoria where buyers can expect to pay up to and above 1,700 per sq ft, but you can still pick up a neighbouring resale property at closer to 1,200 per sq ft. The most sought-after properties are one-, two- or three-bedroom flats. We recently sold a period conversion, first-floor, one-bedroom flat for 995,000 or 1,600 per sq ft, breaking records for the area, but the important point is that there is still comparable value to be found. A lot of our buyers want a weekday pied a terre, although an eye to investment and the security of the location is always a driving factor. Rentals are still returning well and it's an unbeatably central location."
Rachel Thompson, partner at The Buying Solution, agrees: "The redevelopment of Victoria Coach Station and the investment driven into Victoria Street has aided Pimlico's desirability."
Despite the renaissance in the second quarter for London prices, the market hasn't returned to the lofty heights of last year, with values down 1 per cent on the same period of 2014 in traditional prime postcodes and 1.1 per cent lower in the second tier of top London properties, Marsh & Parsons' analysis shows. However, it is important to place this in the context of the 13 per cent increase seen in Prime London house prices between Q2 2013 and Q2 2014.
The resurgence of price growth in the capital this spring was mainly driven by increases in outer prime London. Neighbourhoods to the west, such as Brook Green and Balham, have averaged the strongest growth across the quarter at 1 per cent. Buyers here can expect values around the 1.17m mark. These areas are popular with families and professional couples, who are snapping up the larger more affordable properties as soon as they come to market. Investors are looking further out for good returns. In outer prime areas, the typical rent for a two-bedroom home has risen by 8.9 per cent in the 12 months to June 2015, 1.5 per cent higher than central London.