The Prime London market has cooled from 4.3% in Q1 2014 to 3.1% in the three months to June, as the level of competition has eased off. Supply increased by 26% in the last quarter while the number of registered buyers per property fell from 24 in January to 16 in June.
Peter Rollings, chief executive officer at Marsh and Parsons, was commenting on the Land Registry House Price Index.
He said: “There is a property market outside of the world-famous postcodes of Prime Central London – and it’s starting to steal the limelight.
“As prices in the capital have steadily risen, areas further afield have enjoyed a huge renaissance in popularity. Offering a more affordable range of house prices and a ‘village’ vibe, Outer Prime London has extended a crucial olive branch for growing families and young professionals taking their first step onto the property ladder.
“The average price of a family home with two or more bedrooms here is less than half that in more central areas, but also offers some of the best capital gains in the long term – as high demand fuels some of the most significant house price rises witnessed in London.”
Outside Prime Central London Clapham, Brook Green and Balham have recorded house price growth surpassing 20% annually, while Brook Green has seen prices increase by 8% in the last three months alone. Comparatively properties in Holland Park and Chelsea have risen by the same percentage over the whole year.
Prices of one-bedroom properties in Outer Prime London have grown the fastest of any property type across the city, increasing by 28% in the past year, the equivalent of £116,622, or £320 a day.
Rollings said: “After a frenetic start to the year, the pace of house price growth has slowed this quarter as the market stabilises and returns to more normal trading conditions.
“With more choice coming onto the market, sellers are able to find their next onward purchase and consider trading up.
“Calmer conditions in the market have meant buyers view purchasing London Prime property as a less daunting process than has been the case previously.”
He added that the commonly held view of London being propped up by overseas investors has been debunked, as “we’re seeing a new wave of UK ’pension’ investors looking for steady rental yields and guaranteed long-term capital growth as a nest egg for retirement”.
Indeed, UK investors accounted for 31% of Prime London purchases during Q2 2014, the highest recorded level on record, while overseas buyers accounted for 21%.
