Prime London Property Prices 'Expected to Rise'

The value of properties located in prime central London locations are expected to rise over the course of the year, according to Savills...

The value of properties located in prime central London locations are expected to rise over the course of the year, according to Savills. The firm published a report into the state of the capital's residential markets and noted that forecasts for prime London regions have been upgraded "in light of the strong performance in the first half of 2011".

Both rental and capital values have risen in all the prime districts in the city, which could be good news for property investors who already own real estate in one or more of these areas. Prime central regions - including Mayfair, Notting Hill, Kensington and Chelsea - have attracted foreign buyers who have helped contribute to the upward price movement, the firm explained.

Meanwhile, the districts of Wapping and Canary Wharf, which are considered prime locations in the east of the city, have seen year-on-year rental growth of 11.6 per cent in the second quarter. This was closely matched by Islington and Hampstead in north London, where rental values rose by 11.3 per cent over the same period.

According to Savills, the strong rental growth, particularly in the east of the city, has helped draw investors to the market. A shortage of suitable properties, as well as demand from corporate tenants, has contributed significantly to the rising rents in parts of the capital.

The organisation went on to add that it has revised its 2011 forecast for price growth across prime London properties upwards to six per cent for all regions and eight per cent in central districts. The report explained that uncertainty in the eurozone is "driving demand into London as a safe haven".

Last month, Savills highlighted the potential for income generation from regeneration properties, with head of residential research Yolande Barnes explaining that returns from housing have "remained strong in the medium and long term". She added that over the course of a decade, regeneration developments across the UK delivered returns of 8.8 per cent capital growth, as well as higher yields than surrounding areas.

- Tuesday 19 July 2011

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