Demand for properties in Kensington continue to soar
Luxury home prices in Kensington appreciated to an all-time high in June, driven primarily by soaring demand from overseas nationals seeking to take advantage of a weak pound and sought a haven for their assets, according to a new Knight Frank report. The study shows that the average price of a luxury prime central London property, in areas such as Kensington, has appreciated by 34 percent since March 2009, largely due to growth in Asian investors and a rise in the volume of people escaping the political turmoil in the Middle East. “A lot of Middle East buyers already own property in London, but we are seeing them upgrading to a larger property to give them the possibility of a more permanent residence,� said Mark Pollack, co-founder of Ashton Chase, an estate agent in North West London.
But not only is there greater national and international demand to buy property in Kensington, but research shows that demand is also growing for property to rent in Kensington. In fact, tenant inquiries are also growing for rental homes in most neighbouring areas, with greater demand for property to rent in North Kensington and property to rent in South Kensington, mainly because of the growing number of overseas nationals coming into the country. The current Eurozone crisis, in particular, is driving greater demand for property to rent in London, especially in primary locations such as Kensington, Chelsea and Mayfair, among others. Knight Frank’s London Lettings Index shows that since the beginning of the year, European tenants have secured 30.4 percent of all new lets in Central London, compared to 25 percent during the same period in 2010. Excluding very strong year-on-year growth in the number of new French tenants, up 80 percent, the biggest growth in new tenant volumes came from the so-called PIGS countries: Portugal, up 62 percent year-on-year, Ireland (up 76 percent), Greece (up 33 percent) and Spain (up 73 percent) pointing to a rise in professionals and high-ranking executives relocating to London.
Prime central London lettings volumes have increased by seven percent year-on-year and rents have risen by almost 26 percent since the low point they hit in June 2009, to hit a record high. Liam Bailey, Knight Frank’s head of residential research, comments: "European demand has been a constant feature of the central London lettings market, with French, Italian and German tenants taking substantial shares of lettings.” The rise in London rental prices of course means that landlords are yielding higher rental returns. With tenant demand for London properties continuing to rise, almost a third of landlords – 29 percent – said that their rental income increased during the second quarter (Q2) of 2011, according to research by buy-to-let mortgage specialist Paragon. The study reveals that 13 percent of landlords surveyed have increased rental rates across their portfolios by between two and four percent, saying they had increased rental income up to six percent. Nigel Terrington, Paragon Group Chief Executive, said: “Results from our latest research shows that rental income has increased steadily during the second quarter. Landlords are continuing to experience high levels of demand for their properties so have been able to make small increases to rent levels, without making accommodation unaffordable.”
Source: Marsh & Parsons Estate Agent – Property to rent in London, Chelsea, Mayfair