Property sales rates in London now stand at around 75% of the long term average trend and have increased the most for units priced under £600 per square feet and over £1,000 per square feet, according to a new report from CB Richard Ellis.
It has also found that the highest selling properties have all been part of exhibitions in Asia and there is strong demand for prime products or apartments with growth potential.
Buying in London is particularly attractive for overseas buyers because of exchange rates. It says that buyers in Hong Kong, for example, still enjoying average currency discounts of around 20%.
The highest values in London are still found in the traditional prime postcodes with average apartment prices in Kensington and Chelsea currently 9% above peak levels at £764,000, but other areas are catching up. Average apartment prices in parts of Camden and Hampstead have grown by over 200% since the market peaked in 2007.
The north London market has been particularly strong with average apartment prices in the surrounding postcodes of St John’s Wood showing over 50% growth, while Angel recorded an increase of 43% cent. Prime pockets are also spreading west with uplifts of 48% in Notting Hill, 33% in Parsons Green and 44% in Lancaster Gate.
‘The top end of the market is attracting such a wide range of buyers from all over the world that it is in effect insulating itself from any one economic cycle. Traditional suburban areas are more reliant on domestic purchasers, who are still battling borrowing issues, so the gap between Prime Central London prices and the rest of the country is widening,’ said Jennet Siebrits, head of Residential Research, CB Richard Ellis.
‘Overseas investors are adopting an increasingly risk averse strategy and are sticking to developers with strong reputations and schemes in known hot spots. Canary Wharf is still extremely popular given the area’s strong rental growth, while riverside schemes continue to be highly sought after,’ Siebrits added.