Bucking the national trend, property prices in London continue to climb. The gap between property prices in London and the rest of the country is now greater than ever. Whereas in the past London prices were used to forecast national house price movements, the London market now stands alone.
According to Knight Frank, London property prices have increased by 6% over the past five years. Nationally prices have fallen by an average of 11%. In the most sought after boroughs this growth is even more extreme with prices in Kensington & Chelsea rising by some 37%. The capital is performing like its foreign counterparts – New York and Hong Kong.
So why is London bucking the trend and what makes London property such a sound investment? Supply and demand always fuels the market but in London supply is restricted by strict planning controls and a shortage of land to develop. Those who move out of London are also choosing to keep hold of their property rather than sell, as high rental yields make London homes a sound investment. As a result there are now 30% fewer unsold properties on the market than 5 years ago. Competition for a home in London is fierce as property offers a far better return for investors than the average high street savings account.
In prime London boroughs it is foreign investors who are bringing new wealth to the City. Half of the properties priced over £2million are purchased by foreign investors. Investors from China, Russia, the Middle East and Europe, where the pound continues to struggle, are only too keen to have a slice of the burgeoning property pie.
With many of London’s central areas saturated with buyers, 2013 marks the start of the ripple effect as those struggling to buy homes in central London look towards the suburbs. Prices in many of these areas now exceed their 2007 peak as fierce demand means many buyers are having to offer above asking price to secure their dream home. It seems the boom times are returning and spreading further afield.
Property is now one of the preferred investment choices as it has bounced back quickly during this recession. Whether you are looking to secure your first home or you are a seasoned investor, Hanne &Co’s Property Department has extensive experience of dealing with both UK and overseas clients. Our team has a wealth of knowledge and understanding of the London and Home Counties property market and our expertise will ensure your sale or purchase goes through as quickly and smoothly as possible.
Call us on 020 7228 0017 or email for a quote
Tim Mendes da Costa
Hanne & Co