New research from central London estate agency, Bective, has revealed which prime London postcodes have put in the strongest performance over the last five years where property value appreciation is concerned, as well as sharing their predictions on how the market will perform over the coming five years.
According to Bective’s analysis, the average value of a flat in the prime central market has fallen by -10.2% since 2016, now at £1,730 per square foot. Similarly, flat values have also fallen across the wider prime London market (-3.7%) and the prime London fringes (-4%).
At the same time, the average value of a house in the prime central market has fallen by -4.4% to £1,893 per square foot. However, across the wider prime London market, house prices have climbed by a notable 15.3%, while they’ve remained largely flat across the fringes (-0.1%).
When dissecting the market at postcode level, there are a number of prime postcodes that have seen high-end home buyers enjoy positive movement in the value of their homes.
Prime central postcode growth
Although the W8 postcode is the only central prime area to have seen flat prices hold their value over the last five years (+0.7%) house prices have climbed by 11.2%, while in the SW1W postcode, house prices have also increased by 16.9%.
Prime London postcodes
Across the wider prime London market, the NW3 postcode has seen the average flat value jump by 9.9%, while in W1W this growth climbs higher still to 29%.
The NW3 postcode has also seen the average value of a house increase by 19.2%. W11 (+11%), NW8 (+13.6%) and W2 (14.6%) have also enjoyed positive movement in house prices, while the W1H postcode leads the pack with a huge uplift of 94.7% in the average value of a house.
Prime London Fringe
Just the SW4 postcode has seen the average value of a flat hold its value over the last five years (+0.1%) across the prime London fringes. However, larger levels of positive growth have been seen across house values in the SE1 (+8.9%), SE11 (8.9%), W6 (8.7%), SW11 (+6.8%) and SW6 (+4%) postcodes.
Prime Market Predictions
While topline market performance has stuttered over the last five years, Bective believes the next five years will see a strong reversal in previous market trends.
Based on a combination of current and previous market activity, growing market sentiment and other influential market factors such as development, stock availability and foreign interest, Bective expect to see a central prime property revival in the form of a 21% uplift in overall real estate values over the coming five years.
They also predict a 16% increase across the wider prime market by 2026, with the prime London fringes also seeing property prices climb by 11% in value.
Craig Tonkin, Bective’s Head of Sales, commented: “London performs very independently to the rest of the UK property market and this has been well demonstrated when comparing house price growth performance since the start of the pandemic.
"However, the prime market also acts very independently to the wider London landscape and a combination of political uncertainty due to Brexit and a reduction in foreign buyer interest has proved more problematic across the very top tiers of the market.
"As a result, the prime property market has stuttered somewhat where price appreciation over the last six years is concerned and this is evident pretty much across the board.
"Of course, much like any segment of the market, there are those postcodes that have gone against the grain and remained in favour amongst high-end buyers to register very strong uplifts in real estate values.
"We are starting to see evidence that the prime London market is now poised to make a strong return to form in 2022 and since the easing of travel restrictions interest has continued to build. Only time will tell as to the impact of the Omicron strain on this market revival but Covid uncertainty aside, the appetite for homeownership across London’s most prestigious postcodes remains strong.
"In the long term, we are also predicting very strong growth across all areas of the prime market. The central prime market, in particular, is forecast to perform very well having trailed more peripheral locations in recent years.
"A good prime central market can attract price appreciation in the region of three to four per cent per annum, although in 2007 we saw phenomenal growth of 27% in a single year. While this level is unlikely in 2022, there is much anticipation that it will be the ‘bounce year’ as prime London swings back in fashion with the world’s wealthiest homebuyers.”