London property market expected to defy national downward trend

It is booming and blooming in the UK property market if you know where to look. Activity in the property market may have slowed in recent months causing a dip in nationwide home prices, but there is one region of the country that continues to defy the market slump, and that is the capital city of London.

The latest property price index released by LSL Property Services and Acadametrics shows that the capital was the only region of England where residential property prices increased in December 2011, thanks to strong demand for property for sale in London.

The index reveals that the average price of a home in London appreciated by 0.6 per cent in December compared to the previous month and by 3 per cent against the corresponding month in 2010.

LSL Property Services commercial director David Brown said: “Prices in London have bucked the national trend, not falling in any of the last six months, and growing annually by three per cent.”

Activity in the London property market has been strong thanks to an influx of foreign buyers and a rise in the number of landlords looking to take advantage of high demand for property to rent in London by adding to their buy-to-let portfolios.

Estate agents offering property for sale in Marylebone, Knightsbridge, Kensington & Chelsea, Mayfair, among other parts of prime Central London property, will agree that the property market in this part of city is particularly attractive due to a chronic housing shortage coupled with strong demand from wealthy homebuyers.

Such is the shortage of houses and flats for sale in Marylebone for instance, many would-be purchasers are prepared to rent in the short-term in order to bide their time until the right property becomes available to buy.

This is placing even greater pressure on a high level of demand for property to rent in Marylebone, driving rental values up in the process; an attractive proposition for buy-to-let property investors.

John Heron, managing director of Paragon Mortgages, commented: “Buy-to-let is making huge progress and we are seeing solid, steady levels of growth. 2012 will be another interesting year for the buy-to-let market, and we need to continue to build on the success of 2011.”

Andrew Ellinas, director of leading estate agents Sandfords, which offers a wide selection of houses and flats to rent in Marylebone, says that the mood in central London is rather upbeat despite the sluggish nature of the market across most parts of the country.

He commented: “Everyone thinks the value of their house has gone down in the last few months, except in London, where things are very different. Property prices remain stable and vendors who seriously want to sell are doing so very quickly if the price is realistic.”

The strength of the property market in Marylebone appears to be rippling out to highly desirable secondary destinations in London.

The property market in Little Venice in Maida Vale, located a short commutable distance from Marylebone, is a prime example of an area located just outside of central London, which is booming at the moment.

Anyone looking at either a property for sale in Little Venice or a property to rent in Little Venice will find that competition for the best homes is fierce, which is explains why property prices and rents are sky-high.

Furthermore, despite the uncertainty in the wider UK property market, prospects for the property market in primary and secondary parts of London continues to look positive offering good prospects for further capital and rental growth.

Director of research at Hometrack Richard Donnell said: “On a national basis house prices have not increased over the last 18 months - a theme carried over into January 2012 when prices were unchanged.”

“London looks set to buck the national trend again in 2012 thanks to overseas buyers providing a boost to prices in London’s prime areas.”