Prime London market to see price rises again after years of falls

Savills has set out its annual house price forecast for prime London - and after years of price falls, the prediction is for increases. 

Prime central London prices are expected to increase eight per cent next year and a total of almost 24 per cent by the end of 2026.

After seven years of falling values, totalling 20 per cent, property in the capital’s most prestigious postcodes is overdue a recovery, Savills reports.  

“We’ve already seen the beginnings of this recovery, primarily driven by demand for larger houses and, as such, by locations such as Notting Hill and Holland Park. But, renewed demand for flats during the second half of 2021, particularly from those looking for a pied-à-terre, suggests growth is likely to become more balanced, both in terms of location and property type, going forward” according to Frances Clacy, research analyst at the agency.

London’s domestic prime markets, which encompass high-value homes in locations such as Chiswick and Putney are also expected to outperform the mainstream with growth of 13.5 per cent over the next five years. 

“Less reliance on mortgage debt means less exposure to rate rises in a part of the market also likely to benefit from a trickle effect out of central London” says Clacy.

Beyond London, Savills expects to see changes in working patterns underpin demand in more rural areas further away from major employment centres, albeit to a lesser degree than over the past 18 months. 

In prime regions prices are expected to grow four per cent next year, and 19.3 per cent over the next five years.