Industry news has been dominated in recent weeks by the sale of Penthouse D in London’s iconic One Hyde Park development for £140m in ‘core and shell’ state, making it the city’s most valuable property, with or without internal walls. The price is evidence that even at the very top end of London property, there are still international buyers – in this case as unnamed Eastern European – looking to diversify and protect their wealth by investing in the capital’s real estate.
Despite the strengthening pound making inward investment comparatively more expensive for most international buyers, prime Central London (PCL) property prices have continued to rise in recent weeks as increasing interest from both foreign investors and domestic owner occupiers energises the market. In stark contrast to the early stages of the post-financial crisis rally, however, it is secondary London locations including Wapping and Canary Wharf that are now pacing property price gains in the capital.
Within Central London, the discrepancy in recent price performance is now increasingly pronounced. Marylebone, good value in the context of PCL, saw prices rise 4.2% in Q1 and some 19.3% in the year to end-March. By contrast, prices in Chelsea, Knightsbridge and Belgravia rose just 0.6% in the first three months of 2014 and only 5% in the twelve months to end-March.
The strength in these secondary areas partly reflects the greater influence of domestic buyers and partly the changing mood of investors seeking better value. Buoyed by low interest rates, wage growth and a broader economic recovery that is gathering pace, house prices across the UK have continued their recent positive momentum.
According to Nationwide, house prices across the UK rose 1.2% in April and some 10.9% in the year to end to April, the first time that annual price growth has reached double figures since 2010. Meanwhile, the latest lending volumes figures from the Council of Mortgage Lenders show mortgage levels in the UK a staggering 43% higher than a year ago, fueled in no small part by the government’s Help to Buy scheme.