This article by Anna White of The Telegraph on September 26th, 2013 shows that for the first time escalating house prices in south-west London have outpaced property values in the capital's centre.
“Prime” property (the top five to 10pc of the housing market by price) in the
affluent south-west London belt, which stretches from Fulham to Wimbledon,
increased by a record 11.8pc over the past year.
Prices in central London continued to show steady year-on-year growth of 5.6pc
but were overshadowed by a burgeoning "domestic market" with the
city's south west, north (7.4pc) and east (6.5pc) all experiencing an
uptick, according to new research from Savills.
The real estate adviser’s report quashes criticism of the Conservative’s Help
to Buy scheme, the second stage of which starts in January.
At this week’s Labour Party Conference, shadow chancellor Ed Balls warned the
programme, in which the Government guarantees 95pc mortgages on all
properties worth up to £600,000, could push up prices forcing young buyers
out of the market.
However, the residential property recovery is being driven by equity rich
Londoners and foreign investors, as opposed to Help to Buy expectations.
Lucian Cook, head of research at Savills, said: “In the south-west belt there is still a store of wealth from bonuses earned before the credit crunch and money made recently by hedge fund managers. Europeans are also moving into the areas like Fulham, in which prices have jumped 114pc over the past eight years.”
The analysis shows that £22 out of every £100 of equity in the UK housing market over the past year was spent in London. Therefore the total £146bn of equity applied to buying in the UK, £33bn was spent in London.
Mr Cook said: “This is a cash-driven phenomenon and completely unrelated to Help to Buy. It provides no evidence of a credit-fuelled boom in the wider market.”
The hike in house prices in south-west London is also due to a reluctance to move further out into commuter zones such as Guildford.
“This is a psychologically big move and often ties in with finding a new school. Following the recession people are not exploiting the pay gap between south-west London and the Surrey corridor. Mindful of job security, they’re staying put and therefore allocating more wealth towards housing,” he said.
There is a new build development pipeline around Canary Wharf, and continued appetite for warehouse conversions in Wapping. Gentrification of fashionable areas such as Shoreditch and Dulston is also driving up London prices.
“But talk of a housing boom is premature. Transaction levels are still very low at around 60pc - it is still not a fully functioning market,” Mr Cook concluded.
Despite this, at the top end, the cost of mansions in the capital's centre in the £10m plus bracket has increased by 38pc since 2007. The most expensive properties purchased in London over the past year include a Regent’s Park house for £80m and a luxury pad on Avenue Road, St John’s Wood, sold for close to £25m. While a house in Richmond went for £12m.
Article Source: http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10334345/House-prices-rises-in-south-west-London-beat-capitals-centre-for-first-time.html
Lucian Cook, head of research at Savills, said: “In the south-west belt there is still a store of wealth from bonuses earned before the credit crunch and money made recently by hedge fund managers. Europeans are also moving into the areas like Fulham, in which prices have jumped 114pc over the past eight years.”
The analysis shows that £22 out of every £100 of equity in the UK housing market over the past year was spent in London. Therefore the total £146bn of equity applied to buying in the UK, £33bn was spent in London.
Mr Cook said: “This is a cash-driven phenomenon and completely unrelated to Help to Buy. It provides no evidence of a credit-fuelled boom in the wider market.”
The hike in house prices in south-west London is also due to a reluctance to move further out into commuter zones such as Guildford.
“This is a psychologically big move and often ties in with finding a new school. Following the recession people are not exploiting the pay gap between south-west London and the Surrey corridor. Mindful of job security, they’re staying put and therefore allocating more wealth towards housing,” he said.
There is a new build development pipeline around Canary Wharf, and continued appetite for warehouse conversions in Wapping. Gentrification of fashionable areas such as Shoreditch and Dulston is also driving up London prices.
“But talk of a housing boom is premature. Transaction levels are still very low at around 60pc - it is still not a fully functioning market,” Mr Cook concluded.
Despite this, at the top end, the cost of mansions in the capital's centre in the £10m plus bracket has increased by 38pc since 2007. The most expensive properties purchased in London over the past year include a Regent’s Park house for £80m and a luxury pad on Avenue Road, St John’s Wood, sold for close to £25m. While a house in Richmond went for £12m.
Article Source: http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10334345/House-prices-rises-in-south-west-London-beat-capitals-centre-for-first-time.html
