Spending £1 million on a home in London severely limits choice for property buyers as prices go through the roof.
Around 43% of homes in prime residential areas of the capital are worth more than a £1 million, according to figures for the quarter ending September 30, 2012, from estate agents Marsh & Parsons.
The survey reveals the number of properties valued at £1 million is increasing at a rapid rate – in September 2011, a third of properties were worth £1 million or more. Now that figure has increased by a third as prices have shot up more than 11% in the past three months.
Whereas most £1 million homes were confined to Central London neighbourhoods like Kensington and Chelsea in September 2012, the net has spread wider – bringing in areas like Clapham, Balham, Battersea, Barnes, Pimlico, Little Venice and Brook Green.
Prime London neighbourhood homes have an average value of £1.8 million, while those in the newer hot spots are priced at an average £1.2 million.
Meteoric price rises
Rising prices over the past two years has also pulled more homes in to the £2 million plus band in London.
Around 18.5% of all homes in prime residential areas in London are worth £2 million or more, compared to 14.3% 12 months ago, while 35.5% of homes in Central London are valued at £2 million or more.
Peter Rollings, CEO at the estate agents, said: “After the meteoric price rises seen in prime London in the past few years, the number of property millionaires in the capital has also shot up. Properties no longer have to be palatial to be worth £1 million.
“International and domestic buyers have been flocking to prime property in recent years, but this influx of wealth is no longer concentrated in the most central locations. With the supply of homes especially constrained in the central prime areas, wealth has been overflowing into areas like Balham, Clapham and Brook Green.”
Seller’s market
The research also found balanced supply and demand slowed short-term growth, with 14.7 buyer registrations per instruction in the quarter, down from 17.5 in the previous quarter.
Meanwhile, property supply was up 2% in the quarter.
“Although the number of homes coming on to the market remains at near historic lows, it improved in the last quarter at the same time as buyer numbers fell back. It’s not yet a buyer’s market, but easing competition has factored into slower quarterly price growth,” said Rollings.
“Buyers are spending more time educating themselves on the current market and stamp duty developments, rather than acting with urgency. Properties need to tick every box – not to mention be correctly priced – to convince the more speculative buyers to make a move quickly.”
