Asking prices - whether for letting or sales stock - are all about confidence and in London vendors and landlords appear to have buckets of it despite the slow, rumbling flow of bad news from the nation’s economic volcano.
Central London is even more extreme in its ability to buck the overall British market and while rents in the whole of London are up 14%, Central London asking rents have risen by 25%. And that’s before the mad rush of January and February kick off as people start new jobs, look to find better located or bigger homes.
London as a whole has seen Prime sales asking prices rise by 3.5% over the past year to an average of £1.22 million but Central London has climbed by 9.53% to £2.16 million. Star of the sales scene is arguably (under priced) Hammersmith & Fulham where prices are rising by 18.5%. These are staggering figures given that, even in the UK Prime market, national average prices are barely rising at all (0.24%).
Nevertheless, anyone wise enough to have purchased a typical Central London prime property at the bottom of last year’s market will have seen their investment rise by almost £350,000 or 10.9%.
But as any agent knows and as mentioned at the beginning of this piece, it’s confidence about attaining an asking price among vendors and landlords that drives up property prices in sales or letting. Although Central London’s Prime lettings and sales tend to be more volatile (because the market is smaller and prices higher), nevertheless the latter part of 2011 and the early weeks of 2012 have been all pointing in one direction – up.
Comments last year that Central London is rapidly becoming a breakaway economic island within the UK (The Fulham Free State or Republic of Regents Park, perhaps) may appear true on paper and be backed up by developments such as the Candy Brothers' One Hyde Park development - PrimeLocation.com data would indicate otherwise.
Firstly, the population of Central London is on the rise, swollen by the clichés we’ve all come to see in headlines – Russian oligarchs, Qatari Royal personages and so on. But more quietly, last year some 250,000 Europeans (5% of which are French, it should be noted, Mr Sarkozy) slipped into London and at least 10% are relatively wealthy people usually looking for somewhere to rent in prime, central areas.
This, along with an increased number of wealthy Brits looking to own or rent property in Central London, continues to create demand for a property market where supply remains flat, despite the best attempts of up-market developers. Central London is under-supplied by a factor of approximately 10% compared to Greater London, our figures show.
There are reasons for this, but given the space available here, perhaps a subject to be tackled later and in more detail.
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