New research has revealed that the real estate sector in London's South Bank district has outperformed the wider central London market since 2007. According to Knight Frank, median annual price growth from 2007 to June 2012 stood at seven per cent, with returns averaging ten per cent. However, the data also showed house prices have increased more quickly in the past three years, averaging at 14 per cent, while returns stood at a typical 16 per cent.
The South Bank's proximity to the City is one of the reasons cited for its success among residential real estate investors, although the firm added the quality of the developments in this part of the capital is another factor that has boosted its appeal. "These new developments are providing a standard of accommodation that has simply not been provided in this area in the past," the report asserted. Knight Frank also noted that one and two-bedroom apartments have attracted the most attention from investors, while larger properties are more popular among owner-occupiers.
Last month the firm published research indicating that house price growth in the central London markets is beginning to slow. The value of prime property in the city's central areas increased by just 0.5 per cent in August, compared to July, with the annual growth rate now standing at 9.9 per cent - a decline on the 12 per cent recorded at the beginning of 2012.
Despite the apparent slowdown now, though, the cost of buying a home in desirable areas of the capital has increased by 49.9 per cent since the onset of the financial crisis in March 2009 and has resulted in prices currently being 14 per cent higher than their previous peak. The firm pointed out interest from overseas buyers has continued to buoy many districts of central London, with Russian, Indian, French and Italian investors particularly active in the city's property market at present.
- Monday 10 September 2012