London property prices could continue to soar

There are early indications that the general price of property for sale in London will continue to appreciate throughout the rest of this year.

With property consultants Knight Frank reporting a 20 per cent year-on-year rise in buyer registrations in June, London property prices are continuing to rise, with 34 per cent growth in prices for the capital's best addresses over the past year.

In fact, luxury home prices in central London are now at a record high, thanks mainly to a surge in overseas nationals buying property in the capital.

Greater demand has helped to push up the average price of a luxury home in Central London. This is reflected in the price of property for sale in Kensington and property for sale in Mayfair. This can also be seen in places like Richmond, which provides further evidence that London is a great place to invest for solid capital growth.

The study shows that more foreigners are taking advantage of the weak Sterling and also see London as a safe haven to protect their wealth from political and economic instability in their home countries.

Charles McDowell, a senior sales negotiator at Knight Frank, said: "We are seeing the very wealthy from the world's trouble spots coming to the UK – they think it's a no-brainer."

Leading London based estate agents Marsh & Parsons report that they have an average of 13 buyers registered for each home for sale in London, with this ratio much higher in prime London.

The company recorded its second ever highest monthly tally of property sales in the capital in March of this year, despite the fragile state of the economy, they firmly expect demand to grow further as economic conditions improve, pushing prices higher.

"It's not surprising that London property prices have increased so far this year," said Peter Rollings of Marsh & Parsons. "We have enormous numbers of buyers coming into the market."

With enormous national and international appetite for homes in primarily locations, such as property for sale in Chelsea and property for sale in Fulham, among others, the gap between London property prices and the rest of the UK is widening.

Research from estate agents Savills reveals that the gap between London residential property prices and average values in the rest of England and Wales is at its widest for ten years.

The typical home in London is now worth 113 per cent more than the average in England and Wales, their analysis of Land Registry data shows. This compares to a differential of 73 per cent in 2005/06 and just 47 per cent in 1995.

Consumer confidence in the UK housing market is improving, according to a survey by Building Societies Association (BSA) which shows that a growing number of people are far more positive about the market's future outlook.

But while property prices are generally expected to increase in the long-term, a fragile economy and stringent mortgage lending conditions are restricting property sales activity, currently at a historic low, preventing any significant capital growth, with the exception of London, which is in a league of its own.

Savills anticipate that London property prices will rise by around 30 per cent over the next five years, and very few pundits would disagree.

Source: Marsh & Parsons Estate Agents – Property for Sale in Pimlico, Richmond

Cheap mortgage rates increases demand for homes in London

Cheap mortgage borrowing rates is an even greater incentive to now look at potentially buying property in London.

Fresh research by Moneyfacts.co.uk shows that mortgage borrowing costs – both fixed and tracker-rates – have fallen to their lowest level in 23 years, which suddenly makes the idea of buying property in London considerably more attractive.

Improving access to cheap credit, caused by a record low interest rate, means that more prospective buyers are looking at property for sale in Hammersmith, property for sale in Parsons Green, property for sale in Fulham and property for sale in Brook Green, among other parts of London.

A shortage of homes in London has been pushing prices higher in recent months, but cheap mortgage rates mean that more homebuyers, including first time buyers, can now make that leap into new homeownership - an exciting but often financially difficult step.

With very few signs that interest rates will increase in the short-term, lenders have been competing for new business by steadily lowering their mortgage borrowing rates.

According to the research, two-year fixed rate mortgages now average 4.32 per cent, rising to 4.92 per cent for a three-year fix, with a five-year fixed rate at 5.29 per cent. A two-year tracker mortgage now averages 3.37 per cent.

"Earlier this year the market expected a rise in bank base rate that saw mortgage rates start to rise," said Michelle Slade, spokeswoman for Moneyfacts.co.uk. "An imminent rise in bank base rate now appears unlikely and the cost of funding on the swap rate market has reduced."

She added: "Lenders appear to be applying cuts equally across all LTV [loan to value] tiers, which is good news for first-time buyers, as previously cuts were only being applied to the lower LTV bands."

Wherever you are looking to buy property, whether it is property in Earl's Court, Kensal Green, Stockwell or even property in Putney, it appears that competition from other prospective homebuyers, including investors, is growing.

With a number of would-be purchasers being forced into rental accommodation instead of buying, rental values are rising. Consequently, many investors are adding to demand by purchasing homes across the capital, from property in Notting Hill to property in Maida Vale, in a bid to take advantage of soaring tenant demand.

The latest monthly residential property survey from Hometrack confirms that property searches are indeed improving. The number of home sales agreed by estate agents in May had risen to 10.6 per cent, the highest since 12.6 per cent in March.

Richard Donnell, Director of Research at Hometrack, said: "The first six months of 2011 have seen the housing market holding up better than many had expected. Low transaction volumes, low mortgage rates and forbearance by lenders limiting the number of forced sales have all played their part."

It is unsurprising that more people are looking for property for sale in London. Aside from being a home in which to reside, property also remains one of the best investments, offering high returns.

Source: Marsh & Parsons – Property for Sale in Kensal Green, Stockwell, Earl's Court

Busy summer anticipated for London property market

With more Brits and a flurry of overseas nationals buying property in London, leading estate agents Cluttons predict that it could be a busy summer period for London's property market. This could spell good news for vendors with property for sale in Richmond, property for sale in Pilmico and property for sale in Barnes, among other parts of the capital. 

Despite the slowdown in the property market nationwide, demand for homes across London has strengthened in recent months, ensuring a greater volume of enquiries for properties in Barnes, Richmond, Pilmlico, Stockwell and Notting Hill, among other popular destinations.

This growing demand looks set to continue and fuel the London property market over the summer, traditionally a quiet period for the housing market, with buyers conducting searches over the holidays in fear of missing out on a suitable property. 

James Hyman, Partner for Residential Sales at Cluttons, said: "There is so much pent up demand in the market that competition for good property is as fierce as ever. Buyers are telling us they are wary of postponing their search over the holidays in case they miss out and will instead continue to actively look throughout July and most of August."

With Savills reporting that a total of £16.5 billion has been invested in the capital's housing market by foreign property investors in the past five years, it comes as little surprise that more Brits are postponing their summer holidays to focus on buying property in London, with demand for property in Chelsea through to property in Battersea continuing to rise.

"There are more buyers coming from India and Pakistan than China – and they're spending more," said a recent Savills report. "This group is now the most important to the London market among the emerging economies."

Many Asian investors, for example, are attracted to London because the market looks ripe for growth. The city now offers better value than Beijing, Shanghai or Hong Kong, according to recent research by Knight Frank.

A Knight Frank report said that with a budget of £400,000, someone could purchase a freehold house in London, but in Beijing you can't even get a central apartment for that sort of money.

"We're forecasting 30 per cent growth over the next five years in property prices in London," said Liam Bailey of Knight Frank.

Property has long been considered to be a good investment, and with many pundits projecting future house price growth, now could be a particularly good time to invest in London's property market.

John Elliott, Managing Director of house builder Millwood Designer Homes, says that with the cost of living continually rising, buying a new home could be "more of an investment than you think" and "now couldn't be a better time to buy".

Elliot points out that with a national shortage of new homes being built there is insufficient supply to meet demand. House builders are constructing fewer new homes now than at any time since 1923 and inevitably this shortage will cause house prices to rise.

In fact, new data from the Land Registry, widely considered to be one of the more reliable barometers of house prices, shows that house prices fell in every region of England and Wales except London in May.

Average London property values rose by 2.9 per cent against an average nationwide decline of 0.4 per cent in May.

The Land Registry figures clearly illustrate the pressing need for more homes in London, suggesting that prices will rise further in the capital, as demand continues to grow.

Source: Marsh & Parsons – Property for Sale in Stockwell, Chelsea, Notting Hill

London property prices buoyed by overseas demand

London property prices are continuing to appreciate, on the back of growing demand, particularly from overseas, according to various reports.

The latest report from international estate agents Savills shows that investors from India have replaced the Chinese as the largest group of overseas buyers purchasing property for sale in London. 

Asia's expanding economies, growing middle class and favourable foreign exchange rates, has made London a magnet for Asian investors, particularly those from India.

"There are more buyers coming from India and Pakistan than China - and they're spending more," the report stated. "This group is now the most important to the London market among the emerging economies."
Savills estimates that a total of £16.5 billion will have been invested in London by overseas property investors during the five-year period to 2011.

Yolande Barnes, head of Savills research, said: "We think that the already established preference of buyers from the Asian subcontinent for London will mean that Indians will be among the most important buyers from the emerging countries in the future."

In 2010, Indians bought residential property worth £290 million in some of London's most affluent areas, pushing up demand for property for sale in Notting Hill and property for sale in Holland Park, among other parts of Prime London. 

The report says that there is specifically high demand for properties in Mayfair, Belgravia, South Kensington and Chelsea, as well as properties in Holland Park, Regent's Park and St John's Wood.

Historically, property price rises in some of London's most prestigious areas have often rippled out to secondary areas, ensuring greater demand for property for sale in Bayswater, for example, among other highly regarded locations.

Foreign purchasers from other parts of the world, including the USA and Europe, are also helping to fuel greater demand for homes in prime London areas. Overseas purchasers are benefiting from price reductions due to the poor state of the British sterling – 17% for US dollar buyers and 16% for Euro buyers on 2007 pre-crash prices.

Ed Mead, director of sales at Douglas & Gordon estate agents, comments: "There continues to be a strong appetite from well heeled international and city types looking to buy property in London and despite stock levels increasing, demand still outstrips supply so it looks as if prices will continue to rise.

"Although property values in the capital are increasing, there is still a discrepancy between actual values and some rather over inflated asking prices."

The latest Knight Frank study shows that the average price of a home in Prime London appreciated by 1.4% in May 2011, contributing to annual growth of 8.3%. Prices have now increased by 33% since their recent post-credit crunch low in March 2009.

Liam Bailey, head of Knight Frank Residential Research, said: "Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009."

Overseas nationals are also looking to buy property in Maida Vale, West London, and its surrounding areas, according to Marsh & Parsons estate agents.

The company recently opened an office in Little Venice to specifically cater for growing demand for property in Maida Vale and Little Venice.

Peter Rollings, Managing Director of Marsh & Parsons, recently commented: "Maida Vale's property market is extremely popular.  The area is proving hugely attractive to both overseas buyers looking for easy access to the City and the local international schools and UK buyers wanting to move into such a great location."

Source: Marsh & Parsons – Property for Sale in Maida Vale & Mayfair

Hotspot Kensington offers good investment potential

Property prices in Kensington, like much of prime London, are on the up. The foreign demand remains a key driver of price growth, favourable exchange rates mean overseas buyers are benefiting from significant price reductions (17 percent for US Dollar buyers and 16 per cent for Euro buyers) on 2007 pre-crash prices. 

The past decade has seen countless wealthy Russians, Indians and Arabs flocking to buy up swathes of homes in London's most exclusive neighbourhoods. Now the Europeans are following suit.

"While Asian buyers account for the majority of sales of new-build properties in the capital (60% of zone 1 new-build sales in the 6 months to April 2011), European buyers are among those at the forefront of the market for existing homes. In terms of non-UK buyers French buyers account for 6% of the market, Italians 4.5%, Greeks 3.1% and Swiss 2.5%," said Liam Bailey, head of Knight Frank Residential Research.

Whether it is property for sale in Kensington, property for sale in South Kensington or property for sale in North Kensington, homes in each of these affluent areas are in strong demand.

Packed full of different cultural attractions, these areas have a real cosmopolitan feel to them, making them some of the most exciting places to live and work. There is a delightful blend of people residing throughout Kensington, including many different international communities in North Kensington and South Kensington.

These areas are home to some of the most expensive homes in Britain and feature a wide choice of beautiful homes on some of the most attractive residential streets and private roads in London.

The majority of properties in South Kensington, for example, date back to the Victorian era, when there was a boom in new homes, along with the Georgian period. The area is dominated by striking period buildings, including town houses, detached houses, period conversions and mansion blocks. However, there are not many high-rise residential property buildings.

The ever growing shortage of homes in Kensington and its surrounding areas in relation to demand suggests that there has never been a better time for investors looking to buy property in Kensington, North Kensington or South Kensington.

Bailey continues: "Price growth in the prime central London market shows little sign of slowing at the current time. Aside from a brief stumble last autumn, prices have been rising strongly since April 2009."

The latest statistics released by Knight Frank show that average Prime London property prices have risen by 33 per cent since March 2009,

Moving forward, London property prices are expected to continue rising at a relatively rapid rate, which should also benefit markets in other primary locations, including properties in Mayfair, Chelsea and Westminster, among others.

Mark Harris, chief executive of wealth management firm SPF Private Clients, commented: "The forecasts suggest prime central London has still got some way to go with prices - they're expected to rise 30 per cent in the next five years."

Source: Estate Agents - Property for sale in London & Property for sale in Mayfair

Strong demand for prime London properties for sale

Prime central London property prices continue to appreciate at a rapid rate driven by insatiable demand among domestic and international property buyers.

With recent research by Knight Frank revealing that average prime central London property prices have increased by an average of £767 every day over the past 12 months, it is little wonder that more property investors are inquiring after property for sale in London.

Demand is particularly strong for property for sale in Westminster, along with property for sale in Mayfair and property for sale in Chelsea, as these areas are among the strongest performing London property markets.


The prime London property market is being led by properties in the £1 million to £5 million price bracket. This means that as well as property in Westminster, Mayfair and Chelsea, demand is also high for premium homes in other areas, such as Kensington, Fulham and Notting Hill.


The influx of wealthy foreign buyers and their influence at street level is evident in many expensive parts of London. This is adding to demand for properties in other premium areas, including property for sale in Holland Park, North Kensington and South Kensington.

Property exhibitions in Singapore, Kuala Lumpur and Hong Kong are driving more Asian property buyers to London, according to research by CB Richard Ellis (CBRE).

Figures supplied by CBRE show that more than £800 million worth of property - equivalent to around 2,500 properties in London - were sold at exhibitions in the three cities last year.

Peter Rollings, chief executive of London estate agents Marsh & Parsons, says that more than 20 buyers are now registering for every prime property for sale in London registered on the market.

Commenting on the London property market, Rollings told the press: "We've seen some of our busiest months since 2007 this year, and are in the middle of another surge of activity. House prices have already risen five per cent this year, and we anticipate further rises as competition for good quality stock continues to heat up."

The dislocation between the central London market and the wider UK market has widened into a chasm over the past 12 months, according to Liam Bailey, Head of Knight Frank Residential Research.

"Over the past 12 months price growth in central London has totalled 8.3 per cent, whereas in the UK the corresponding figure has been a fall of -1.3 per cent", he said.

He added: "I have pointed to international demand as being a key contributor to London's bounce. There is no doubt that this is true – with more than 60 different nationalities active in the market over the past 12 months. However we shouldn't underestimate the impact of the central London economic revival on pricing."

Bailey is one of many housing experts who believe that the revival in the London property market is sustainable even if overseas demand begins to wane. This is potentially good news for anyone looking to buy property in London, particularly property for sale in Westminster, Mayfair and Chelsea.