According to London Central Portfolio (LCP), property selling for over £1m in Prime Central London locations has gone up to a huge 40% of all transactions, a 15% rise from 2008, the year that signalled the pre-recession market high.
Based on these findings, it’s now possible that 80,000 property millionaires reside in the City of Westminster and the Royal Borough of Kensington and Chelsea, the pocket-sized areas commonly regarded as Prime Central London.
The LCP’s research, founded on Price Paid Data which records every single transacted sale through Land Registry, shows what is actually happening to pricing and price on a micro-level. Whilst many new reports suggest that Prime Central London is becoming unattainable for the domestic market, LCP claims there are still pockets that are within the reach of UK buyers.
LCP’s analysis shows 4 zones, made up of 11 postcode sectors situated in the outer edges of Prime Central London, which have average prices that are under £1m, falling within the Government’s Help-to-Buy criteria of £600,000.
These zones have always been brought together by what, from a historic point of view, has been a downside – the ‘commuter’ effect. The main pockets centre on The Westway (which links to the M40), the Cromwell Road linking to the M4, and Victoria and Paddington stations.
“Historically, prices have been held back in these areas,” Naomi Heaton, CEO of LCP, argues. “This is due to the array of run-down commuter hotels and small ‘stop-over’ pied-a-terres around major trunk roads and train stations which connect London to the rest of the UK. Not to mention the swathes of people passing through these transport hubs daily.”
However, Heaton also says that the areas are ripe for reinvestment and that gentrification is inevitable. “The flip-side of this is that the existing infrastructure and amenities, coupled with pockets of attractive (albeit decaying) architecture make them particularly exciting in terms of future growth potential. We are already seeing them catch-up as development turns the run-down hotels into new des-res.”
Potential buyers may be most attracted to the Thames-side Westminster/Pimlico area, which, despite its prime riverside location, still records below average prices. SW1V 3, the cheapest postcode sector in Prime Central London at £593,600, and SW1V 4, close by to the Pimlico Grid, both slip under the £1m mark.
Investors should also be interested in the more run down zone around Notting Hill (W2 6), Bayswater (W2 1) and Marylebone station (NW16), where prices range from £631,151 to £862,150 and buyers would benefit from excellent transport links and the potential for gentrification.
Dividing Prime Central London into 52 postcode sectors, LCP also examined price growth in these areas since the 2008 pre-credit crunch high, to identify those areas showing the strongest market recovery. 14 postcode sectors experienced growth above 10%, whilst the top 10 all grew more than 12% a year.
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