Lack of supply continues to fuel the London property market. Real estate in prime central London is particularly hard to come by, as it is being snapped up by people eager for a slice of city life in England’s vibrant capital.
One of the world’s most iconic cities, London attracts visitors, businesses, and expats from around the world. We are also seeing an influx of workers into the cities as people return to the office. And, as a thriving business hub teeming with employment opportunities, it is no wonder people are choosing to take up residence in London.
Due to a surging tenant population and high demand for rental properties, asking prices are breaking records across the city.
Property price growth remains steady
House prices across the country increased by 12.4 per cent over the year to April 2022. With an annual growth rate of 7.9% London fell short of all other UK regions, but its house prices continue to climb at a steady pace.
There was a slight increase in the number of houses for sale in London in the second quarter of the year, leading to a slowing of prices. In comparison, prices for prime flats increased by 1.4 per cent during the first three months of 2022, which was the highest growth since the first lockdown in 2022. This means that the price growth rate of flats is inching closer to that of London’s homes (which have historically taken the lead).
As the demand for flats and central properties increases at a faster rate than other London regions, prime central London has assumed its position at the head of the race. The area recently experienced its most robust annual growth rate since September 2014, and prices are expected to continue to outperform most other UK markets.
London’s luxury homes
Another market looking bright is London’s Luxury Homes. The Guardian reported that 61 luxury London properties—each exceeding a value of £10m—were bought in the first six months of the year. This is the highest figure in a decade.
Growth in London’s luxury homes market has largely been fuelled by domestic buyers since the start of the pandemic. But, with the pound in decline, the market is now attracting cash-rich investors from across the globe.
What does the future hold?
In their report on prime London house prices Q2 2022, Savills highlighted that prime central houses are still down 17.6% on their 2014 peak—so there’s lots of room for growth.
Savills has forecast that prices in prime central London will grow by 23.9 per cent over the next five years; all prime London was estimated at 18.9 per cent, and outer prime London at 13.7 per cent.
Leading real estate consultancy, Knight Frank, has forecast that rental values will increase by 22.7 per cent in prime central London and 19.3% in prime outer London over the same five-year period.
With tenant demand rising and property prices on the up, investors might like to consider investing in the property market in London, England’s long-standing and prosperous capital. International buyers, in particular, would do well to capitalise on the UK exchange rate at a time when the pound is trading at historic lows.
If you’re interested in London’s property market, please email us at info@benoitproperties.com to discuss current investment opportunities.
Contact us today to secure your perfect property.
