Prime London property prices are expected to rise by 21% in the next five years thanks to development, stock availability and foreign interest, according to a prediction by Central London estate agency Bective.
Another factor is previous market activity, as Prime Central London flat values have fallen by -10.2% since 2016, while the cost of houses has fallen by -4.4% over that period.
The W8 postcode (Kensington and Chelsea) is the only central prime area to have seen flat prices hold their value over the last five years, (+0.7%) while house prices have climbed by 11.2.
Craig Tonkin, Bective’s head of sales, said: “We are starting to see evidence that the prime London market is now poised to make a strong return to form in 2022 and since the easing of travel restrictions interest has continued to build. Only time will tell as to the impact of the Omicron strain on this market revival but Covid uncertainty aside, the appetite for homeownership across London’s most prestigious postcodes remains strong.
“In the long term, we are also predicting very strong growth across all areas of the prime market. The central prime market, in particular, is forecast to perform very well having trailed more peripheral locations in recent years.
“A good prime central market can attract price appreciation in the region of three to four per cent per annum, although in 2007 we saw phenomenal growth of 27% in a single year. While this level is unlikely in 2022, there is much anticipation that it will be the ‘bounce year’ as prime London swings back in fashion with the world’s wealthiest homebuyers.”
Across the wider prime London market house prices have climbed by a notable 15.3% since 2016, highlighting that these price falls haven’t been experienced everywhere.
Since that time the NW3 postcode (containing Hampstead, Gospel Oak and Maitland Park) has seen the average flat value jump by 9.9%, while in W1W (Great Portland Street Fitzrovia) this growth climbs higher still to 29%.
However the W1H (Westminster) postcode leads the pack with a huge uplift of 94.7% in the average value of a house.
Bective expects central prime areas to rise more than the outer areas, as it predicted wider market prices to rise by 16% by 2026, with prime London fringes seeing values climb by 11%.
Tonkin added: “London performs very independently to the rest of the UK property market and this has been well demonstrated when comparing house price growth performance since the start of the pandemic.
“However, the prime market also acts very independently to the wider London landscape and a combination of political uncertainty due to Brexit and a reduction in foreign buyer interest has proved more problematic across the very top tiers of the market.
“As a result, the prime property market has stuttered somewhat where price appreciation over the last six years is concerned and this is evident pretty much across the board.
“Of course, much like any segment of the market, there are those postcodes that have gone against the grain and remained in favour amongst high end buyers to register very strong uplifts in real estate values.”