Despite mixed messages on the health of the housing market in London, demand for property in key locations in Notting Hill, Holland Park and Kensington remains strong.
Over the last three months the number of properties sold in these areas increased by 17% over the same period a year ago, according to the latest market intelligence report from agents Crayson.
The amount spent on property in prime central London has risen significantly this year. Buyers have spent an average of £157.5 million per month in our area, 27% higher than at the same point a year ago.
The report also reveals that apartments are outperforming houses. Indeed, sales of apartments have dominated the market so far this year, with the number sold rising 32% compared with the figure at this point a year ago. The opposite is true for houses, with sales so far this year down 21%.
Flats have also outperformed houses in terms of price growth. Flats sold in these areas over the last three months achieved prices per square foot that were 13.6% higher than the same period in 2013. Houses saw average prices increase at a still respectable 10.6%.
However, prices per square foot for homes selling in excess of £5 million have plateaued this year. But they are still achieving values which are 28% higher than they were three years ago.
The strongest growth in values continues to be for homes at the lower end of the market, under £1 million, and those priced between £2 million and £5 million, with average values within these price bands having risen by 12.7% and 12.9% respectively.
Within the Royal Borough of Kensington some 24% of properties currently on the market have been reduced in price since they were first marketed. The highest proportion of price reductions is seen in the price bracket over £10 million with 31% now reduced. This compares with just 21% of properties priced at £2 million to £5 million.
The report also says that 25% of the most prolific agents within these area, that is those with more than five properties listed for sale, have reduced the prices of more than a third of their available stock.
‘Put simply, vendors who achieve the best price for their property do so by bringing their home to market at the right price, creating early interest amongst buyers,’ said managing director Nick Crayson.
‘Properties that are launched at an unrealistically high price are missing out on crucial selling opportunities in the early stages of marketing. The average amount of time before a property is first reduced is currently 70 days,’ he explained.
‘Over valuing by agents is increasingly common within our market, something Crayson do not advocate. Potential vendors must ensure that they launch their properties onto the market at the right price, to attract early interest and increase the chance of achieving the best value,’ he added.
The report also points out that outside prime central London, the surrounding boroughs have continued to post significant growth. The outperformance of boroughs such as Hammersmith and Fulham, Wandsworth and Lambeth has meant the significant premium for homes in Kensington and Chelsea has been eroded. Prices in Kensington & Chelsea were 196% higher than those in Lambeth in the middle of 2012. In April 2014, this had fallen to 166%.
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