Overall prices in the sector increase by 2.3% in the first quarter of 2013 and the average prices for prime residential property has now reached a new historic high of £1.53 million, according to the latest Residential Investment Monitor from Cluttons.
The property consultants predict that prices will rise in this sector by 22% over the next five years and it added that following a slowdown in both the sales and lettings markets during the final quarter of 2012, the prime central London residential market has turned a corner, with positive growth recorded across all London regions.
It means that the annualised increase is 6.8%, just ahead of the long run average of 6.7% per annum.
The best performing London region was central North West, incorporating St John’s Wood, Hampstead, Maida Vale, Regent’s Park and Highbury and Islington, which showed price growth of 4.5%, pushing values above the £1.5 million mark for the first time.
Central West on the other hand, incorporating Hyde Park, Notting Hill, Kensington, Holland Park, Mayfair, Paddington and Marylebone saw the smallest increase of 1% over the quarter, which pushed average prices to £2.36 million.
‘Prime central London is once again experiencing robust price growth, driven primarily by the supply drought and strong domestic demand, aided by a greater take up of the historically low mortgage rates,’ said Sue Foxley, head of research at Cluttons.
‘To access property while also securing long term capital value growth, buyers are looking to the edge of core locations with good transport links such as Clapham, Highbury and Canary Wharf, which in turn are benefitting from upward pressure on prices,’ she added.
‘The prime London market appears to have successfully withstood the worst of the economic turbulence and continues to outperform the rest of the UK, albeit with relatively subdued levels of growth when compared to the years leading up to the recession,’ she added.
