6
May
Prime Movers
When it comes to sectors of the property market that command the
greatest levels of attention, prime central London is high on the
list. It is not just that the fashionable and famous districts such
as Mayfair, Kensington and Belgravia are known for their glamour
and high prices, but that they are also a possible indicator of the
top end of the market as a whole. After all, those wealthy enough
to afford to live in properties in that part of the capital will
often have the funds to buy large country houses as well.
That this part of the metropolis may be starting to do well is a
rumour that has been around for a while. Recently, the Times
reported on the experience of estate agents such as Prickett and
Ellis in seeing prices rise in the area.
Moreover, others have been busy endorsing the prime central London
area as a good one for investors to move back into. One example of
this is the view expressed earlier this month by Peter Braithwaite,
head of UK residential at global real estate firm DTZ. He stated
that there was "no doubt" that activity in this market had
increased since Christmas.
He added that investors have come to regard such investments as
wise ones. He said: "More deals are being concluded partly by those
who believe this sector of the residential market is less volatile
than the stock market and also overseas buyers who can obtain
finance and take advantage of the weakness of sterling."
"Even if the bottom of the market may not have been reached, most
purchasers believe that prime central London will prove to be a
good investment in the medium term," Mr Braithwaite
concluded.
These comments came around the same time that the Young Group of
property portfolio managers published its latest investor survey,
showing that there was increased confidence in the prospect over
the next year, as more expected prices to rise and planned to buy
than was the case in the last quarter of 2008. Notably, the figures
were better in London, where 40 per cent of investors were thinking
of purchasing over the next year, compared with 23 per cent
elsewhere.
Although the Young Group figures did not differentiate between
central London and the rest of the capital, the sentiment may
suggest a general positive view of the former. But hard figures are
always the most important indicator and this week provided them.
Knight Frank's Prime Central London Index revealed a 0.4 per cent
jump in prices in April, the first increase in a year. Chelsea,
Kensington and Mayfair all saw prices up by over one per
cent.
So now it appears that real rise in price can be added to better
sentiment. Nigel Ellis, senior partner at Prickett & Ellis,
expressed similar comments to Peter Braithwaite when he noted that
the area has seen activity pick up, with the emphasis again on the
value of such property as an investment. He stated: "There are a
lot of investors and there is investment money, particularly with
the latest Budget and squeezing tensions. You are getting more
people saying: 'I've got money in the bank. What can I do with it?'
People are returning to the safety of assets - solid assets - of
which property is probably a nice one. The British like their
bricks and mortar."
He added: "Commentators are saying now is the right time to move up
and the consensus is we have reached bottom," revealing that the
last three months has seen the firm trebling the number of deals it
has done.
So it seems that for prime central London property, the market may
not simply be on the launching pad. Instead, the roar and flame of
rocket motors may be detected as this sector starts to lift
off.
