Residential property in Prime London will outperform other major asset types and record double digit growth this year, according to a leading international property consultancy.
A report by Chesterton Humberts forecasts capital values to rise 10.1 per cent, compared with the FTSE 100 Index (7.8 per cent, gold (1.4 per cent) and Brent Crude (-3 per cent), which will encourage investors to gravitate towards property over the next twelve months.
As the number of properties on the market remains low, house prices are expected to be driven up by sustained demand from foreign and domestic buyers. Overseas investors will continue to predominantly target apartments within new developments to add to their investment portfolios, whilst growing confidence that the economic recovery has taken hold will bring more domestic buyers to market.
In comparison, equities are expected to rise as corporate prospects begin to improve, but at a slower pace. Meanwhile, the ultimate safe haven gold faces greater uncertainty as global economies appear to stabilise, whilst oil prices are predicted to fall as demand declines from major importers.
Chesterton Humberts’ Prime London Residential Sales Report 2013 Q4 demonstrates just how strong the property market became in 2013. According to the company’s Index, prime capital values rose just over 11 per cent in 2013 as a whole, slightly higher than the previous year as the level of demand remained strong from buy-to-let investors and owner occupiers – both foreign and domestic.
Meanwhile, appraisals, viewings and exchanges all recorded double digit growth compared to 2012. Chesterton Humberts is forecasting that residential property values will grow at a rate of 9.7 per cent p.a in 2014, and 48.5 per cent over the next five years.
Nick Barnes, head of research highlights the advantages of investing in residential property in Prime London: “There is certainly a compelling case for investing in residential property in Prime London. Its long term track record is impressive, having delivered strong capital growth together with low volatility compared to equities and commodities whilst displaying low correlation with other mainstream asset classes. This has already attracted a wide range of prospective buyers.”