"Much like the rest of the UK, London house prices have largely underperformed this year and the current landscape is no different when it comes to the prime London market"
- Marc von Grundherr - Benham and Reeves
The latest market analysis from London lettings and estate agent, Benham and Reeves, reveals that buyer appetite for family homes is helping to drive the prime London market, a market segment that has otherwise seen property values underperform across the board over the last year.
Benham and Reeves have analysed prime London property prices by property type across 20 prime neighbourhoods to reveal which types of homes are most in demand amongst London’s high-end homebuyers based on house price performance over the last year.
Much like the wider UK market, the London market as a whole has struggled this year, as higher mortgage rates cause homebuyer activity to drop across the capital. In fact, the average London house price has fallen by -1.1% on an annual basis, climbing to a reduction of -1.6% across inner London specifically.
The analysis by Benham and Reeves shows that these cooling market conditions have also proved problematic for prime London sellers.
The average price paid for a three-bedroom house across the prime market has fallen by -4%% year on year, with two-bed (-2.7%) and five-bed+ homes (-2.4%) also seeing a reduction. One-bed homes have remained largely static seeing an increase of just 0.2%.
At the same time, the price paid for prime London studio flats is down -1.2% annually, with one-bed flats also seeing a reduction of -3.5% year on year. Two-bed flats have also remained largely static annual house price growth is concerned, with growth of just 0.1%.
However, not every area of the prime London market is struggling and, in fact, two property types have seen strong rates of annual house price growth. The average price paid for a three-bed+ flat is up 1.4%, while four-bed houses have climbed by 3.7%, suggesting that strong demand remains from buyers in search of family-suitable homes.
For those in search of a four-bed house in prime London, the neighbourhoods of Vauxhall, Nine Elms, Borough & Kennington offer the most affordable foot onto the prime London property ladder, with an average house price of £965,071.
In contrast, a four-bed home in Knightsbridge and Belgravia comes in at an average of £5.5m in the current market.
For those looking for a family-suitable flat with three bedrooms or more, Canary Wharf and the Docklands boats the most affordable price tag in the current prime market at an average of £687,333, while Mayfair and St James’s are home to the most expensive price tag at an average of £8.2m.
Director of Benham and Reeves, Marc von Grundherr, commented: “Much like the rest of the UK, London house prices have largely underperformed this year and the current landscape is no different when it comes to the prime London market.
"However, while annual price growth is down pretty much across the board, there remains a strong market for family-suitable homes at the very top tier of the London market.
"Our previous research has shown that following the end of pandemic travel restrictions, the number of foreign buyers entering the London market has climbed. Many of them are relocating their entire families in the process and this increased demand has no doubt been a contributing factor to the strong price performance of family-suitable homes within the prime London market.
"Given the allure that London has to overseas buyers, we don’t expect this trend to slow any time soon, and family-friendly homes in London’s prime markets will continue to be hot property, rising in value as a result.”