The value of prime London residential real estate is predicted to increase by six per cent by the end of 2012. This is the estimation of CBRE, with the firm pointing out property values in the capital currently stand 16 per cent above their previous peak level recorded in 2007, with house price growth of 35 per cent posted in the last three years. Head of residential at CBRE Mark Collins commented: "London's limited source of developable land means that supply will almost never satisfy demand."
According to Mr Collins, an increasing number of international buyers are targeting the city because "super-prime residential markets have emerged as one of the only secure investment options for the world's super wealthy". He added there are many reasons why London is a desirable place to own a property, including its infrastructure, educational establishments, position as a leading global financial hub and culture. The CBRE research found new-build properties at the top end of the market will typically sell for between GBP 1,500 and GBP 2,500 per sq ft.
In its latest House Price Index, the Office for National Statistics noted growth in the London market is outpacing the rest of the UK considerably. In the 12 months to April this year, property values in the capital climbed by 4.9 per cent, compared to the national average of 1.4 per cent. However, as the CBRE figures show, this growth is even greater when only prime real estate is taken into account.
Focusing on where the super wealthy are making property investments in London, the firm recorded a "noticeable shift" towards the east of the city, with buyers prepared to look outside the traditional high-end areas of Mayfair, Belgravia and Knightsbridge towards the financial district in the City. Location is not longer the only important factor in a purchasing decision, though, with Mr Collins explaining developments that offer high-tech security and a "comprehensive concierge service" will attract interest even if they are not in the most desirable districts.
- Friday 22 June 2012