Luxury commuter belt house prices grow faster than central London homes
07-02-2014
Property in London
Prime property prices in the M25 commuter belt are rising faster than prestigious London property locations such as Sandalwood Mansions, in Kensington
Anna White
By Anna White, Property and enterprise correspondent
Property prices in the commuter zones of Greater London have outperformed the capital’s most exclusive central districts for the first time since the housing market crash.
The value of London’s suburban prime residencies – those priced in the top 5pc to 10pc of the housing market – grew 5.7pc over the first half of the year, according to property agents, Savills.
Comparatively, prices in the affluent boroughs of Belgravia, Kensington, Chelsea, Knightsbridge and Mayfair rose just 4.9pc.
Savills’ latest Prime Regional Index showed that the strongest house price growth was in the suburbs within the M25, such as Esher in Surrey or Rickmansworth in Hertfordshire, reflecting the flow of London’s domestic wealth into the commuter markets as they capitalise on ten years of frenzied house price growth in inner London.
London as a whole is now 37.9pc above its peak in 2007 while the suburbs are 8.8pc higher than peak levels, with the average house price at £3.6m and £1.9m respectively.
“The prime market is responding to the positive sentiment in the mainstream market, with stock levels increasing as downsizers in particular sense an opportunity to sell in a more buoyant market,” said Lucian Cook, head of residential research at Savills.
However, the recovery is more tentative in other parts of the country, particularly in Scotland where prime property prices are still 21pc lower than at their height seven years ago. The forthcoming independence referendum is causing some uncertainty, particularly among English buyers looking to invest in a highland retreat.
The renewed spectre of a mansion tax is also deterring some potential movers across the UK until the political agenda becomes clearer.
The report also showed that buyers are favouring urban homes over country pads.
Prime properties in regional cities saw growth of 1.7pc in the three months to the end of June with annual growth totalling 8.1pc.
This compares to quarterly growth of 0.9pc for village properties and 0.5pc for prime properties in rural locations, and annual growth of 5.3pc and 3.3pc respectively.