London two-bed property to break million mark
The research found that two-bedroom properties in Prime London appreciated by 14% during the last year to reach a current average value of £909,203.
Providing this rate of growth continues for the next three quarters the average price of a two-bedroom property in Prime London will be £975,843 by the end of 2013 and £1,010,974 by the end of the first quarter of 2014.
Two-bedroom properties experienced a much faster rate of growth than other types of properties in the three months to June 2013, with a 6% increase from the previous quarter.
The slowest quarterly growth was among four-bedroom properties, the average price of which appreciated by a relatively modest 3% during the last quarter.
Peter Rollings, chief executive of Marsh & Parsons, said: “Compared to the rest of the country, Prime London property prices may seem high, but the figures don’t tell the whole story.
“There is of course a huge variation between different areas in Prime London. Very high value and high demand areas such as Kensington & Chelsea lift up the overall average figures, but there are still many areas of Prime London which represent better value for money.
“As a result, we’re seeing many young couples and first-time buyers heading to parts of South and South West London in search of more space for their money.”
Marsh & Parsons calculated the average price using the mean average value of all the two-bedroom properties in a mix-adjusted, representative basket of properties across the areas of Chelsea, Kensington, Notting Hill, Holland Park, Pimlico, Clapham, Balham, Battersea, Barnes, Pimlico, Little Venice and Brook Green.
In Prime Central London – including just the areas of Chelsea, Kensington, Notting Hill, Holland Park and Pimlico – the average price of property has already passed the £2m mark.
An imbalance of supply and demand is contributing to higher prices. During the last quarter, 11% more buyers entered the market in competition for 14% fewer properties. A total of 18 buyers per property were recorded.
The shortage of housing stock on the market has also resulted in demand for property rippling out from the centre.
As a result, property prices in less central areas such as Clapham, Balham and Battersea are also increasing rapidly. In Q4 2012, an average two-bedroom property in Prime Central London cost 48% more than the average two-bedroom property in Prime London as a whole.
In Q1 2013 this discrepancy narrowed to 45% and in the last quarter the gap closed to just 40%.