The return of overseas investors to the central London property market is helping to boost prices, a study has found.
Flats and houses in prime central London are both enjoying a bounce after the pandemic-enforced slowdown, London Central Portfolio (LCP) said.
LCP found house prices were up by 7.9 per cent in June from the low point of the pandemic in 2021. For flats, the increase was 6.9 per cent and prices for homes with outdoor spaces were up 8 per cent.
One of the key reasons for the rising prices was the return of overseas investors to the market, enjoying their first summer in London since 2019.
“Prime central London continues to be seen as a desirable safe haven, tangible asset and as a hedge against inflation,” said LCP chief executive Andrew Weir.
“When this is combined with a low sterling exchange rate, the apartment market continues to offer attractive investment options.
“For prospective buyers, the built-in attractions of the capital are often the same reasons that sellers can be reluctant to part company with an asset capable of inflating at speed when strong market conditions return.”
Houses continue to outperform flats, but there are signs the gap between the two is continuing to narrow, LCP said.
The return to the office, at least on a part-time basis, has also acted as a catalyst for professionals seeking apartments close to work.
“[The area] is less affected by rising interest rates than the domestic market as most leverage taken is discretionary, and at the moment the flats market appears unaffected,” Mr Weir said.
“More relevant for this market is the need to be close to work, even if only on a part-time basis.”
Homes with outdoor space sold for a little more during the pandemic months, a reaction to the lockdowns keeping people at home, but now that demand is fading.
Mr Weir said the outdoor space requirement reduces as social lives resume.
Property professionals generally agree that prime central London includes the City of Westminster and the Royal Borough of Kensington and Chelsea, parts of the boroughs of Hammersmith and Fulham, and Camden.