Prime London house prices skyrocket by 114 per cent as homebuyers flock back to the city
While prime London property prices have remained largely flat on a year on year basis, life is starting to return to the capital’s top tier, with some postcodes seeing average sale prices climb by as much as 114 per cent.
However, not everywhere has fared so well with some postcodes seeing a reduction in average sale prices of up to -71 per cent.
The research shows that London’s high-end homes commanded an average selling price of £3,229,509 in 2021, down when compared to 2020 albeit by a marginal -0.8 per cent, according to research by debt advisory firm Henry Dannell, shared with Morning Wire this morning.
The firm analysed sold price data for prime London property sales above £2m across 51 of the capital’s most prestigious property postcodes.
A reduction in demand from wealthy foreign home buyers has caused the prime London market to struggle in recent years, initially due to a prolonged period of political uncertainty spurred by Brexit and, more recently, pandemic imposed travel restrictions.
However, with both now a thing of the past, this segment of the London market is expected to make a strong return in 2022 and a number of prime postcodes have already jumped the gun, having enjoyed significant house price appreciation over the last year.
Camden, Westminster and Chelsea
Nowhere more so than Camden’s WC1A postcode, where the average sold price for £2m+ properties increased by 114 per cent between 2020 and 2021.
The borough’s southern tip is also home to the second largest increase, with the WC1N postcode seeing the average sold price increase by 55 per cent on an annual basis.
Westminster’s W1W (35 per cent) and SW1H (34 per cent) postcodes have enjoyed the next largest uplift in prime London sold prices, with the SW5 postcode in Kensington and Chelsea (28 per cent) and the SW1P (26 per cent) postcode, again in Westminster, also seeing increases of over 25 per cent.
A further 25 prime London postcodes have seen positive movement where the average sold price for homes at £2m or above is concerned, however, the same can’t be said for the entirety of the capital’s top tier market.
While Westminster has enjoyed some of the largest annual increases, the borough’s WC2E postcode has also endured the largest market decline. With an average sold price of £3.48m in 2021, sold prices have plummeted by -71 per cent on an annual basis – wiping almost £8.5m off the price paid by prime London homebuyers.
The WC2B (-46 per cent) and WC2R (-41 per cent) postcodes have seen sold prices drop by over -40 per cent in the last year, with 16 other postcodes also seeing a decline.
“There’s certainly a renewed sense of confidence across prime central London and early indicators suggest that 2022 should be a very positive year for this segment of the market, with an uplift in foreign buyer demand likely to be the most significant influence behind an anticipated revival in both transaction levels and sold prices,” explained Geoff Garrett, the director of Henry Dannell.
“That said, we’ve already seen the foundations of this market revival being laid in 2021, with the majority of postcodes registering an increase in sold price values, some doing so quite significantly,” Garrett told Morning Wire
“Unfortunately, some areas have yet to recover and sharp declines at the other end of the market have wiped a considerable amount of value from the average home.”
Geoff Garrett, the director of Henry Dannell
“Of course, this isn’t unusual in a low volume, high-value market like prime central London, where homebuyer preferences are very much influenced by the current flavour of the month,” he continued.
“This shift in the popularity of a given neighbourhood can result in a drastic shift in property sold prices across that particular cluster of neighbouring postcodes,” Garrett concluded.