The latest residential index from Chesterton Humberts shows that prices, stock levels, instructions and viewings all rose in 2012 compared to the previous year and early indicators suggest 2013 will see further improvement in market conditions.
However, price growth varies between submarkets. Knightsbridge and Belgravia recorded the highest quarterly increase with prices up 4.9%, followed by Islington with growth of 2.9%. But in Chelsea and South Kensington values dropped by an average of 1% over the last quarter.
‘After what was a tough year in 2012 with the distractions of the extreme weather, the Olympic/Paralympic Games and a stagnating economy, I am cautiously optimistic about prospects for the prime London market in 2013,’ said Nick Barnes, head of research at Chesterton Humberts.
‘A number of key indicators are looking very positive and the success of Circus West has provided further proof of the undoubted high level of demand for prime residential property in London, whether for lifestyle, investment or safe haven reasons,’ he explained.
He pointed out that this increase in activity is down to a combination of factors, however availability is key. ‘Buyer interest in the prime London segment is largely stock led and the increase in properties being marketed will have encouraged buyers who had been waiting for greater choice before making enquiries,’ he said.
The firm also says that foreign purchasers continue to target London whether for investment or lifestyle reasons or to acquire safe, quality accommodation for their children whilst they study in the capital’s higher education establishments.
‘Whilst overseas appetite is focussed on the traditional prime central areas, there is also demand for quality properties in decentralised locations offering proximity to good local schools and/or easy access into central London,’ explained Barnes.
And he believes that the outlook coming into 2013 looks encouragingly positive. ‘Chesterton Humberts’ pipeline is 41% higher than at the corresponding point last year and the highest it has been since 2009, while available stock is 14.7% higher,’ he added.
The firm forecasts that prime central London capital values will increase by 3.2% per annum in 2013 and by an average of 7.3% per annum over the next five years.
