Despite the economic crisis and eurozone woes, the booming property market in London shows very few signs of slowing, particularly in prime central London were property prices are at a record high.
The latest data produced by CBRE shows that the average price of a home in prime central London has appreciated by 35 per cent over the last three years and is now 16 per cent above the 2007 peak.
Furthermore, the property group estimates that the average price of a home in the heart of the capital will appreciate by six per cent this year in stark contrast to the rest of the UK.
The property market in London is ultimately being supported by rising demand from national and international homebuyers, while housing supply is being restricted by a lack of new build homes. This has created a shortage of property for sale in Fitzrovia, Chelsea, Kensington and Marylebone, among other desirable places in London.
The latest data produced by CBRE shows that the average price of a home in prime central London has appreciated by 35 per cent over the last three years and is now 16 per cent above the 2007 peak.
Furthermore, the property group estimates that the average price of a home in the heart of the capital will appreciate by six per cent this year in stark contrast to the rest of the UK.
The property market in London is ultimately being supported by rising demand from national and international homebuyers, while housing supply is being restricted by a lack of new build homes. This has created a shortage of property for sale in Fitzrovia, Chelsea, Kensington and Marylebone, among other desirable places in London.
"An acute stock shortage and unprecedented buyer demand in prime areas is helping to underpin prices by as much as 10% in the last 12 months as many buyers compete to take advantage of excellent yields and prospect for strong capital growth," said Andrew Ellinas, Director of Sandfords.
Family homes are generally the most desirable properties in London, which will explain why there are very few houses for sale in Fitzrovia or Chelsea, or any other sought after area with easy access to top schools, established infrastructure and excellent transport links.
"London's time-zone, infrastructure, education system and the language help make it the top choice location for a trophy asset," said Mark Collins, head of residential, CBRE.
He added: "London's limited source of developable land means that supply will almost never satisfy demand."
Nevertheless, flats for sale in Fitzrovia and other desirable areas are also in great demand, from both owner occupiers and property investors seeking to cash-in on high tenant demand and rental values.
According to Homelet, tenants in London are now paying an average of £1,187 a month to rent a home, which is much higher than those living in rented homes in other parts of the UK who are paying an average of £653 per month in rent.
HomeLet's Managing Director, Ian Fraser, explained: "There's been a steep increase in the number of young people and families renting a home due to being unable to secure a mortgage."
Unsurprisingly, with rents rising, more landlords are adding to their residential property portfolios, research by Paragon Mortgages shows.
According to the specialist buy-to-let mortgage lender, during the second quarter of 2012, landlords' property portfolios increased to an average of 14.1, down from 12.9 in the first quarter of this year. This is also an increase on the second quarter of 2011 when the average portfolio size was 12.5 properties.
A fifth (21 per cent) of landlords who took part in the quarterly Private Rented Sector (PRS) Trends Survey, said that they were planning to add to their portfolios during the third quarter.
John Heron, Managing Director of Paragon Mortgages, said: "The fact that landlords are planning to make further investments in their property portfolios is positive news. It shows their appetite to grow their business to meet the on-going demands from tenants and demonstrates the viability of the UK's PRS."
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