The majority of house price growth occurred in the first half of 2014, with prime London property witnessing its first price drop for three and a half years in the final three months – a decline of 1.6%.
According to Marsh & Parsons’ latest London Property Monitor, an uplift in supply of prime London properties in quarter four helped to normalise price growth.
Marsh & Parsons said it expected to see annual growth of 3-5% across the capital in 2015, predicting further price rises but at a “calmer pace” than seen in 2014. As of January, there were 13 buyers to every available prime London property.
Figures released by Knight Frank and Markit Economics also found that households perceived the value of their home increased in January. Of the UK 1,500 households surveyed, 19.5% said the valued of their home had risen over the last month, while 3.1% reported a drop.
Balham was identified as the hotspot for first-time buyers and young families by Marsh & Parsons’ data, with property prices in the area outstripping the rest of London in 2014. Prices rocketed by £152,000, an increase of 21%.
Increased demand for homes in the outer prime areas of the capital – where prices are typically 25% lower than the wider prime London average – has pushed the rate of house price inflation up in these areas, the estate agent said. House prices in outer prime London surged 9% during 2014, compared to a 4.3% increase in the prime central areas.
Average prices in exclusive prime central areas Kensington and Holland Park jumped by 8%.
Marsh & Parsons CEO Peter Rollings (pictured) said: “The prestigious prime property bastions of Kensington, Chelsea and Holland Park will always command worldwide appeal from buyers – however everyday demand for more affordable homes has catapulted Balham and other outer prime corners of the capital onto the map.
“Londoners are increasingly willing to compromise on a central location in return for more living space and manageable price tags, and as a result the price growth seen in green ‘village’ suburbs has overtaken the Goliaths of London property this year.”
