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London Residential Prices Saw Massive Growth in First Quarter

LONDON-Prices of houses and flats in prime central London continue to soar. Research by FPDSavills shows that they have tripled in the last eight years

By Charlie Jacoby | Updated on April 25, 2002

LONDON-Capital values in the prime central London residential market bounced back over the first three months of 2002, following falls over the final quarter of 2001. That’s the conclusion of new research by FPDSavills.

Richard Donnell of FPDSavills Research says the scale of these price rises have been exacerbated by a combination of pent-up demand and the limited supply of property available for purchase. Average residential values in prime central London have risen by 200% over the last 8 years on the back of strong demand and a highly inelastic supply of property. .

In recent years demand has been fuelled by aspirational purchasers, with only two fifths of purchasers seeking a main residence. The remaining purchasers have bought second homes or property for investment reasons. The more complex nature of demand for housing in central London, (for example, only 40% of purchasers are UK nationals), is compounded by the fact that purchasers tend to use a much high proportion of equity to fund purchases than that seen nationally (those buying property worth over £1m take, on average a 40% mortgage). .

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