Property Prices in Central London Rise to Unprecedented Levels

According to recent figures, house prices in the UK are rising at their fastest rate since 2007. While many other areas are showing growth, London continues to storm ahead of the rest of the UK. It is not unusual for shoebox-sized flats in prime central London locations to come with £1million-plus price tags.

According to some experts, property prices in London could rise by nine per cent per year, meaning the average flat could be worth £36 million by the middle of the century. Rents in the capital are also at a record high with flats in highly coveted locations such as Chelsea, Mayfair and Kensington commanding £5,000 per month.

Why are prices so high?

London is one of the most exciting cities in the world – it’s a heaving metropolis and home to more than eight million people of every nationality. Its rich heritage and wealth of attractions has helped to make it a global financial centre with many of the world’s leading companies and brands choosing London as a base.

A third of all jobs created in the UK since 2009 have been in the capital. Londoners also earn more, with a household income 30 per cent above the UK average and the gap continues to widen.

London is the destination of choice for rich foreigners and an attractive place to do business. Buyers come from Russia, India, Italy and France, and as China’s economy expands at an ever increasing rate, the capital could see an influx of wealthy Chinese. A competitive exchange rate also encourages foreign investment and benefits the property sector.

Demand for luxury London homes from overseas buyers has helped to drive price increases in recent times. Two-thirds of new homes in London are sold to investors.

Office rental

Office take-up is also high in the capital, with technology and media companies accounting for much of the growth. While prime areas such as Kensington, Mayfair and Soho remain highly desirable, many companies are looking to lesser-known areas to re-locate.

Kings Cross recently became the centre of attention when it was announced as the base for internet giant Google’s $1billon headquarters. The City of London also continues to attract investment from financial and banking institutions, and there are plenty of opportunities for those looking at the office space Lime Street has to offer. This street is in the heart of the city and home to the world’s most famous insurance markets, Lloyd’s of London.

London has recovered from the financial crisis far more rapidly than other areas of the UK. While the wider economy fought against a double dip recession, London remained resilient and recent forecasts show that growth will continue over the next decade.

London has always been a coveted business location and property prices remain high as investors flood to the capital. In many areas demand outstrips supply and solving the problem will require a combination of more new-build properties and encouraging existing owners to come to the market.