Prime London property activity rebounds across both urban and suburban areas

Created: 26 Apr 2022

Activity in prime central and outer London property market is on the rise with prices of homes increasing at their fastest rate for seven years in March this year. Prospective home buyers, including overseas investors, office-bound professionals have flocked the housing market, as the London prime housing market continues to strengthen its position as a property hub.

The London residential property market has historically exhibited resilience underpinned by world class infrastructure, educational institutions, services and amenities as well as being a global financial centre. A short-term impact of the pandemic, for buyers and tenants to move further out into the suburbs or countryside, has now undergone a reversal whereby a number of demand indicators are back to pre-pandemic levels.

The number of agreed sales as an example, in data revealed by property consultancy TwentyCi which includes cash buyers, exceeded pre-pandemic levels by 26 per cent in March. Across Britain, this is representative of 237,512 properties with agreed sales, and 290,381 completions over the first three months of the year. London accounted for a significant number of these property transactions.

A key attraction has been the uptick in yields, as well as discounted entry points in prime central London (PCL) relative to pre-pandemic valuations. In February, the average PCL return for flats was 3.4 per cent, with flats composing 87.5 per cent of the supply of housing inventory for this area. Across the UK capital, whilst average prices of a home rose 5.9 per cent annually to £534 977, research from Benham and Reeves indicates that discounts of 3.6 per cent – equivalent to £47 per square foot, or £24,000 for the average flat – are still prevalent.

Whilst the repercussions of the geopolitical and macroeconomic events will remain unclear going forward, particularly with respect to the luxury property market, high levels of demand are clear for prime London property. Urban locations are catching up with outer London suburban areas such that regional growth is being driven by space and greenery as well as proximity to amenities, offices and quality infrastructure.

The first quarter saw the capital begin to realign with the UK’s wider prime regional markets. The strongest annual price growth was recorded by homes with large gardens, up 9.0% annually, with leafy suburbs such as Richmond (+9.1%), Ealing (+8.1%), and Chiswick (+6.5%)… Shoreditch, Canary Wharf and Islington saw quarterly price growth of +3.7%, +3.4% and +3.3% respectively as City workers started to return to their desks.

https://propertyindustryeye.com/london-records-strong-price-growth-as-city-workers-return-to-their-desks/

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