The data from agents Strutt & Parker, also shows that he market over £2 million didn't seem to be affected with buyers continuing to pour in seeking security in bricks and mortar as geopolitical concerns picked up.
The firm’s London residential quarterly report shows that a total of 834 homes were sold in the prime central London sector in the first three months of the year, an 8.3% increase over the quarterly average for the past 10 years.
‘Although the sub £2 million market stalled this quarter, the £2 million to £5 million and £5 million plus markets have seen exceptional growth both in values and volumes compared to the same period last year. We have seen a dramatic 47.2% increase in the value of homes sold during the first quarter compared to the quarterly average for the past 10 years,’ said Stephanie McMahon, the firm’s head of research.
Chelsea, South Kensington and Fulham have seen the greatest quarterly value of properties sold since 2001. When looking at the quarterly averages for the past 10 years, Chelsea, South Kensington and Fulham saw a 65% increase in values, with a 17% increase on the number of properties sold.
Kensington and Notting Hill also performed strongly, whilst Knightsbridge and Belgravia surprisingly saw a slight dip with a 1.1% decrease in value of transactions, and a 26.7% decrease on the number of homes sold.
Lettings slowed down slightly on last year with 2,912 lets agreed, representing a 2.2% decrease. One reason for this could be that tenants who secured good rental levels a year ago have seen no motivation to relocate to new properties with potentially higher rates.
The firm says that there has also been a reduction in corporate rentals likely due to larger companies evaluating internal viability.
One area of the market booming was houses in Chelsea. There was a significant increase of 6.6% in houses let in Chelsea, South Kensington and Fulham compared to the first quarter of 2013.
‘The rental landscape in Chelsea is changing fast and we have seen a sharp increase in buy to let investors over the past two years,’ said Zoe Rose, head of London Lettings at Strutt & Parker.
The firm expects prime central London prices to continue to rise by around 6.5% in 2014, but for them to drop back to 2% growth in 2015 as political uncertainty emerges ahead of the General Election. These forecasts are a stark contrast to 2010 and 2011 when PCL house prices surged by over 13% year on year.
Nearly 45% of all Strutt & Parker buyers in central London in the first quarter of 2014 were originally from overseas. Comparing this quarter to the first quarter of 2013 there was a 31.4% increase in buyers from Asia, with the highest number in the Knightsbridge and Belgravia area, and a 20.8% decrease in buyers from the Middle East.
