By Inessa Falina,
Head of Property Services, Ashton Rose (part of Oracle Capital Group)
London has long been an attractive location for purchasing property, whether for investment or to live. Despite a turbulent market in recent years, this has not changed, and the city remains the leading choice for high-net-worth-individuals around the world.
Indeed, according to a recent study, London is once again first among world cities that attract wealthy people with incomes of €23 million and above. There are 4,296 HNWIs in London, most of whom are entrepreneurs who have established their own businesses, which they have either sold or in which they have become shareholders. The average assets of these multimillionaire individuals, who are usually men aged on average 57-years-old, amount to €125 million.
More generally, in the last seven months London has led in terms of UK property price growth with over 6%, followed by eastern England with over 3.6%. In general, the average real estate price in the country grew by 1.9% in June reaching £168,941. In 10 of 13 regions, houses and apartments appreciated in value last year, except for Scotland, Northern Ireland and Yorkshire and Humberside.
This year, the highest growth rate at 6.6% was in real estate units worth up to £1 million while property worth between £1 million – £2.5 million grew by 5.4%. “Super-premium” property worth over £10 million went up by 1.5%.
The Crown Estate, owned by Her Majesty the Queen, operates a number of properties in central London. Due to an increase in real estate prices, its annual revenue grew by 5.25%, reaching a record £252.6 million. By law, the Queen owns 15% of this amount, so that by 2014 – 2015 she will have amassed around £38 million. The rest goes to the HM Treasury. Among the diverse real estate properties owned by the Crown Estate are buildings at London most iconic addresses such as Regent’s Street, wind farms and most of the UK seabed. The estimated value of the entire investment portfolio owned by the Queen is around £8.1 billion but although the reigning monarch is considered the owner of properties, he or she has no right to sell them.
Currently there are approximately 8,230 streets with an average value per property of over £1 million in the UK. Of these, 34% of them, and the 20 most expensive, are located in London. As before, first place goes to Kensington Palace Gardens, a street with high-level security surveillance, located opposite Kensington Palace. The average price of a house here reaches £36,066,148. In second place is The Boltons, also in Kensington, with an average value of £23,375,758, and where Madonna once owned a mansion. Grosvenor Crescent in Belgravia is third with an average of £19,768,963. The average price of real estate by district, rather than by street, is topped by Kensington (£2,326,439) then Knightsbridge (£2,034,706).
The most expensive area outside London is Virginia Water in Surrey, with an average property price of £1,822,560. This area is chosen by buyers wanting to purchase a family residence with some land, and is located in a protected park area with golf courses, a world-class spa and is close to some of the best private, public and international schools in the UK.
It is widely acknowledged that properties within walking distance of underground stations are more expensive and recently published research indicates the price increases £152,640 per each minute from one underground station to another.
The lack of residential property in London is becoming an ever more serious problem with each year. To tackle this problem the Mayor of London, Boris Johnson, has proposed a new large airport in the east of the capital and to replace Heathrow with a new residential area that could potentially accommodate about 250,000 residents, which would partly solve the problem. London attracts a growing number of tourists and is a major transit point for passengers. In this regard, the UK’s main airport Heathrow needs more space and capacity to increase the passenger traffic.
UK universities and schools remain on the list of the most prestigious educational institutions in the world. In addition to the steady growing demand for apartments for students, investors are attracted by the long-term guaranteed income. The growing number of students coming to the UK ensures that residential complexes for students near universities across the UK are becoming one of the most popular investment types.
In short, the property market in London is returning to its historic buoyancy, with an increasing number of opportunities and an ever-changing landscape.
