Research by Henry Dannell has revealed that while prime London property prices have remained largely flat on a year on year basis, life is starting to return to the capital’s top tier, with some postcodes seeing average sale prices climb by as much as 114%. However, not everywhere has fared so well with some postcodes seeing a reduction in average sale prices of up to -71%.
We analysed sold price data for prime London property sales above £2m across 51 of the capital’s most prestigious property postcodes.
The research shows that London’s high-end homes commanded an average selling price of £3,229,509 in 2021, down when compared to 2020 albeit by a marginal -0.8%.
A reduction in demand from wealthy foreign home buyers has caused the prime London market to struggle in recent years, initially due to a prolonged period of political uncertainty spurred by Brexit and, more recently, pandemic imposed travel restrictions.
However, with both now a thing of the past, this segment of the London market is expected to make a strong return in 2022 and the analysis from Henry Dannell suggests a number of prime postcodes have already jumped the gun, having enjoyed significant house price appreciation over the last year.
Nowhere more so than Camden’s WC1A postcode, where the average sold price for £2m+ properties increased by 114% between 2020 and 2021. The borough’s southern tip is also home to the second largest increase, with the WC1N postcode seeing the average sold price increase by 55% on an annual basis.
Westminster’s W1W (35%) and SW1H (34%) postcodes have enjoyed the next largest uplift in prime London sold prices, with the SW5 postcode in Kensington and Chelsea (28%) and the SW1P (26%) postcode, again in Westminster, also seeing increases of over 25%.
A further 25 prime London postcodes have seen positive movement where the average sold price for homes at £2m or above is concerned, however, the same can’t be said for the entirety of the capital’s top tier market.
While Westminster has enjoyed some of the largest annual increases, the borough’s WC2E postcode has also endured the largest market decline. With an average sold price of £3.475m in 2021, sold prices have plummeted by -71% on an annual basis – wiping almost £8.5m off the price paid by prime London homebuyers.
The WC2B (-46%) and WC2R (-41%) postcodes have seen sold prices drop by over -40% in the last year, with 16 other postcodes also seeing a decline.
Henry Dannell Director, Geoff Garrett, commented:
“There’s certainly a renewed sense of confidence across prime central London and early indicators suggest that 2022 should be a very positive year for this segment of the market, with an uplift in foreign buyer demand likely to be the most significant influence behind an anticipated revival in both transaction levels and sold prices.
That said, we’ve already seen the foundations of this market revival being laid in 2021, with the majority of postcodes registering an increase in sold price values, some doing so quite significantly.
Unfortunately, some areas have yet to recover and sharp declines at the other end of the market have wiped a considerable amount of value from the average home.
Of course, this isn’t unusual in a low volume, high-value market like prime central London, where homebuyer preferences are very much influenced by the current flavour of the month. This shift in the popularity of a given neighbourhood can result in a drastic shift in property sold prices across that particular cluster of neighbouring postcodes.”
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As featured in City A.M