It’s a tale of two property cities.
London’s property boom has radiated out, reaching once-unfashionable parts outside the traditional prime central area, but which are now themselves regarded as prime.
Meanwhile, a council in the midlands has been inundated with offers for homes priced at just £1 each – less than half the price of a latte.
According to agents Cluttons, prices are shooting up by £383 a day – the equivalent of a return air fare to New York – in prime central London, and are expected to go up another 22% over the next five years.
According to agents Marsh & Parsons, prime London property prices are performing even better than those in the hallowed central postcodes such as Kensington & Chelsea.
In places once regarded as being on the ‘wrong’ side of the river, prices are now up 12.8% in the last year – and by 3.6% in the first quarter of this year alone.
It means that buying a prime central property in Mayfair will no longer command quite such an enormous premium over one that is merely prime in, say, Battersea. Mind you, all things are comparative: the premium is still a massive 43%, albeit down from 47% last year.
Investors looking for best profits are now shifting their search from the prime central postcodes outwards: in Battersea, rents have gone up by 6% so far this year, and the proportion of purchases by investors in prime London has risen from 17% to 25%.
Peter Rollings, CEO of Marsh & Parsons, said: “Home owners have seen their equity soar as a result of such significant price growth in the past few years.
“We are now seeing many of those seizing the opportunity to sell at prices that have recovered and in many cases exceeded the highs of 2007, and then re-invest in the same market, taking advantage of the historically low mortgage rates available due to the Funding for Lending scheme.”
The average price of a property in prime central London now stands at just under £2m (£1,939,534), up 2% since the start of the year and up 9.3% on a year ago.
The average price of a prime London property is now £1,357,837, up 3.6% this year, and 12.8% since a year ago.”
Kinleigh Folkard & Hayward also confirmed the boom and says it has sold 98% of all its instructions in the first quarter of this year in the large south-west region of the City.
Lisa Mackenzie, regional sales director for the south-west London region, said: “Throughout the first quarter, we saw unprecedented numbers of buyers across south-west London.
“Consequently, following the continued shortage of properties for sale, supply has not kept up with demand and we are selling virtually every property on our database within days.”
She said there is “huge competition” for properties, with many going for above their asking prices as a result of open days leading to sealed bids.
In total contrast, in Stoke-on-Trent the local council is offering homes for £1 apiece in the run-down Cobridge area.
More than 600 people have so far expressed an interest in the two-bed homes, where the local authority is offering £30,000 loans for essential improvements.
Comments
If you were to visit Stoke, and esp. this area you would soon understand why property is so cheap. The fact is you couldn't even pay me to own a property down that street. I understand the council are trying hard to regenerate the area - but they have been for many years now.
I own property in Stoke and while it may be higher yielding in rental terms compared to my London properties, it is in fact NO comparison. It is another universe.
If I had my time again, I would stick to investing in London. It may be another world - but it's a fabulous world!
'In total contrast, in Stoke-on-Trent the local council is offering homes for £1 apiece in the run-down Cobridge area'.......
Which if you know the area is about 99p over market value, add ( an upto ) £30,000 loan and you have a repossession 5 years down the line.
Prime Central property is going up, I reject the projections of 22% growth. Firstly, the prime central london was static for the past 7 years. So it is merely catching up.
In London, there are still cheap places to buy and rent. It is a shame that crap parts of london are not been regenerated for provide nice places to live. Everyone wants to live in Notting Hill, and it is putting pressure on prime places...