We’re all aware that those owning properties in desirable parts of Central London have benefited enormously from strong price growth and low interest rates over the last few years. With the cost of property in upmarket London areas, such as Chelsea, Belgravia and Mayfair, up by some 12.9 percent over the last year; it’s no wonder Prime London homes are so sought-after. It’s predicted that if growth continues at the current rate, the average would reach £2 million by 2016
However, many equity rich homeowners in these plush parts of town are moving up the ladder without selling their existing home. This inevitably means that property in Prime London is becoming even more scarce. For wealthy property owners, however, their actions make sense. Many of those who have incomes that weren’t affected by the crisis in 2008 have overpaid on their mortgages, if indeed they have them at all. This has left them in good stead when it comes to equity. Therefore, more money’s freed up to finance the next property purchase – with many affluent Londoners eschewing luxury cars and holidays in favour of getting another property on their portfolio to benefit from the massive popularity of the housing market in these areas.
For some homeowners, a way to profit from the housing market gains is to rent out their property for additional income and moving into a new home. With the influx of foreign buyers, plus the lack of confidence in more ‘conventional’ investments such as stocks and shares and bonds, Prime London property is seen as a sure bet. Rental yields are also strong – with many professional, affluent families looking to rent property instead of buy, as London’s most luxurious areas are beyond their reach.
House Price Gains
A recent report said that the average price for just a three-bed home in London’s choicest postcodes has gone up by some £729 a day – a rise of 19 percent since April 2013. This is the equivalent of £5,120 a week, or eight times the median salary for Londoners. With a recent survey showing that those selling property in the UK capital could get 99 percent of the asking price, with the average around 96 percent, it’s clearly a sellers’ market. Buyers are prepared to pay huge premiums on plush London housing in great locations and that have access to the best culture, entertainment, facilities and schools. Data shows that London properties are staying on the market for just 18 days before going under offer – while for the rest of the country it’s two months!
Despite the Bank of England Governor, Mark Carney, voicing concerns of a bubble; it’s evident that while there’s a housing shortage it’s unlikely that prices will fall. In the most desirable areas of London, sellers can choose their price – with many opting to simply stay put and invest spare cash in other property, rather than selling. For those looking to purchase property in Prime London, it’s best to contact an estate agent with great local connections and knowledge to get access to the top properties.