The report, which covers prime properties in Chelsea, Kensington, Fulham, Notting Hill, Knightsbridge and Belgravia, shows that all of these areas experienced their highest sales transaction values since 2006.
Kensington and Notting Hill saw the largest increase at 21.8% compared to 2012 transaction values. Chelsea, South Kensington and Fulham also saw an increase in transactions values compared to 2012, up 14.5%, which is likely due to selling the largest quantity of flats since the peak in 2006.
The report suggests that the displaced demand from the latter half of 2012 and earlier in 2013 continued to accelerate activity and pricing, resulting in property values seeing a 13% year on year growth. There were 63 recorded sales over £10 million in the prime central London sector in 2013, a 5% increase on 2012.
Nearly 44% of all Strutt & Parker’s London buyers were foreign in 2013, reflected in the high proportion of cash purchases in the prime central London market, nearly 67%, as foreign buyers tend to leverage post purchase.
‘We have seen Chelsea, South Kensington and Fulham assemble the most diverse spectrum of international buyers, while Knightsbridge is highly attractive to those from the Middle East. Kensington and Notting Hill has changed from being a more domestic market to an overseas hotspot,’ said Stephanie McMahon, head of research at the firm.
The lettings market has proved equally buoyant. There were 13,752 property lets agreed in the prime central London market during 2013, representing an 11.6% increase on 2012 and surpassing the peak of 2009 by 8.2%.
The largest change was seen in the Knightsbridge and Belgravia submarket where house lettings increased by nearly 32% compared to 2012. ‘Lateral apartments and small family houses continue to be the properties of choice,’ said Zoe Rose, head of London Lettings.
She explained that families, professional couples and single workers are all seeking properties to rent. Most are in their 20s, 30s and 40s and work in the finance sector. One burgeoning trend identified is the growth in workers from the IT and Technology industries.
Strutt & Parker expects prices to grow by around 6% in 2014, although the outlook is increasingly uncertain as it remains to be seen how quickly buyers and sellers start to worry about the 2015 election, around which it expects stagnation in transaction levels. Sustainable growth is expected to return throughout 2016 and 2017.
‘Not only has London residential property outperformed all other investments over the past 30 years, but unlike a share certificate or a case of wine it’s also a brilliant place to live,’ said Andrew Scott, head of London residential at Strutt & Parker.
