Average house price in London passes £500K for the first time

The average asking price of a London home is now more than £500,000, according to recent research by the UK’s leading property portal, which showed that the average price in the capital in May rose month on month by 3.1 per to a record £509,870.

This means a typical home in London is now more than twice as expensive as the national average in the UK, which is £249,841, after a small rise of 2.1 per cent in May. The same research, conducted by website Rightmove, showed that UK house prices have had the strongest start to the year since 2004, increasing by 9.1 per cent in the five consecutive months from January. This surge has been driven by record price growth in London, the South-East and East Anglia.

“Last year’s activity was crazy, this year’s is ridiculous,” commented one London agent, adding that “multiple offers and sealed bids are the norm”. It is thought that upward price pressure in London and increased activity is being driven by a shortage of fresh stock on the market and a flurry of deposit-gifted first-time buyers trying to get on the housing ladder before prices ratchet up even more.

As expected, Rightmove’s research highlights huge differences in asking prices between boroughs in London. Kensington and Chelsea borough remains the most expensive, with the average price now £2,371,633, compared with £2,082,767 a year ago. Next is the City of Westminster, where the average asking price is £1,669,590, compared with £1,488,892 a year ago. The third most expensive borough is Camden, followed by
Hammersmith and Fulham, Brent, Islington, Wandsworth, Richmond-upon-Thames, Kingston-upon-Thames and Barnet. The borough with the lowest average asking price is now Barking and Dagenham.

London penthouse market reaches dizzy new heights

Penthouses now account for sales worth more than £1billion a year and represent a booming sector of London’s property market, according to research by a leading international property advisor.

Penthouses are being developed across London, but vary dramatically in price, although it is now impossible to buy a penthouse in the capital for less than £1million, the same research by CBRE showed. While it is possible to find penthouses priced between £1.5million and £3million in Islington and Camden for example, in prime Central London the starting point for penthouses is closer to £4million. In the most desirable boroughs prices average £13million and can easily top £4,000 per square foot.

On average, penthouses sell for a 60 per cent premium over the rest of a development, and can account for 20 per cent of a project’s gross development value.

Mark Collins, CBRE head of residential, commented: “Penthouses of the quality on sale in London now cement our capital’s new status as a home-from-home for the super-rich as well as providing an invaluable store for their wealth. With the burgeoning volume of billionaires in the world and the increasingly international appeal of prime London real estate we anticipate that the penthouse market will continue to be a very exciting and elusive space going forward.

Other findings from the research showed that penthouses these days have a range of features, including a private entrance or lift, a library or office space and additional suites for guests or staff. It’s not unusual for buyers to demand strong security measures, such as bullet-proof windows, a panic room and even retina recognition systems.

The most requested features by penthouse buyers in London are: high floor-to-ceiling heights, with glass wrap-around; generous outdoor space – up to 20 per cent of the floor area; luxury specification, notably better than the rest of scheme; being at the top of an iconic tower and designed by a leading architect; top appliances with ground-breaking technology; a broad range of facilities and additional amenities in development; state of the art security; spectacular views over the city or a park; location, location, location!

More prime London homes being bought by foreigners than by Britons

Foreigners have overtaken Britons as buyers of desirable London homes after research showed they bought more than half of prime residential homes sold in the capital in the past year to April 2013.

A report by international estate agent Knight Frank showed that overseas buyers accounted for 52 per cent of all £2million-plus residential properties sold in prime central London (PCL) between March 2012 and March 2013. The surge in sales to foreign buyers was led by citizens from Russia, China, the US, the United Arab Emirates and India.

In terms of market share, Russians bought 8.5 per cent of £2million-plus London homes sold in the year to April 2013, followed by buyers from the UAE, US and China, with each accounting for 2.8 per cent, while India accounted for 2.6 per cent, Hong Kong 1.8 per cent and Switzerland 1.1 per cent. Sales to citizens from Eurozone countries as a whole accounted for 9.5 per cent.

The same report showed that there is more buoyancy in the £3million-plus market than the £2million-plus market. During the year to April 2013, the number of properties priced between £2milion and £3million fell 16 per cent year-on-year, while sales of £3million-plus homes were steady. The increase in stamp duty on sales of property over £2milion to seven per cent from five per cent and the introduction of a 15 per cent charge on sales through offshore companies are likely to have caused this effect.

The attraction of prime real estate in London has been strengthened by the UK’s low interest rates, weaker Sterling and the appeal of owning an immovable Sterling asset in a buoyant and desirable destination.