Almost half of prime London properties bought as investment not homes

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Gloucester Gate - Credit: Archant

Nearly half of all property purchased in high end parts of central London was bought by investors, a report said.

Figures from estate agent Marsh & Parsons showed that 42 per cent of property in prime central London (encompassing such areas as Regents Park, St John’s Wood and Marylebone) was bought by investors, rather than owner occupiers in Q2 2015. This is an increase of eight per cent on the same period last year.

The estate agent, which has offices in Camden, Little Venice and Marylebone, also found that investors are the most common type of buyer across prime London as a whole.

Peter Rollings, CEO of Marsh & Parsons, said: “Investors are a good gauge of the overall health of the London market. If there was any cause for concern about the future property market, investors would be upping sticks and moving elsewhere. But that fact they are still putting down roots in the capital shows how fertile current conditions are.

“While there may not be much action to see at the moment, prices are still growing, and the foundations for fruitful capital returns are strong.“

Property in prime central London areas is on average 27 per cent higher at £1,516 per square foot than the rest of the capital.

The estate agent also said that prices in prime London experienced their first quarterly increase since September last year, although price growth remains much slower than last year, and on an annual basis it found that values dipped.

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Nevertheless, looked at over a longer period, the value of a prime London home increased by 12.1 per cent.

This was attributed to climbing demand, which saw an average of 12 buyers for every available property in June 2015.

Overseas buyers made up over a third of sales in the three months to June, predominantly through an influx of European buyers re-locating to London.

These figures were echoed by separate research from Savills estate agent, which found quarterly price increases across all price points for property in prime north west London.

Savills also reported an annual property price dip, ranging from 0.3 per cent decrease for properties under £1million, to a reduction of 2 per cent for those costing more than £5million – with the greatest impact therefore being seen in houses in Hampstead.

Over a five-year period, however, price appreciation remained strong with homes at the lower end of the scale nearly 30 per cent more expensive than in 2010, and £5million plus property up 22 per cent.

The estate agent forecasts the prime north west London market to pick up by next year and values to rise by nearly a quarter by the end of 2019.