Who would have thought it? Trendy Chelsea trumped by house price growth in lowly SW6? Tim Harrison casts his eye over the latest real estate inflation figures

Not so long ago, house prices in SW3 and SW10 were galloping away. But despite the recent heat, there’s a slight chill in the air when it comes to current values.

Research by the number-crunching division of Savills reveals that homes in buoyant central London boroughs such as Kensington & Chelsea are starting to plateau, with prices rising just 1.6% in the second quarter of 2013.

The place to be buying bricks and mortar is, Savills advises, south-west London, where Fulham is currently showing 3.2% growth in the most recent quarter, and 8.5% growth year on year, compared to prime central’s 4.4%.

Stamp duty changes at the £2million-plus mark has undoubtedly had an effect, persuading many overseas investors to cast their net wider and see what their yen, euro and roubles will buy if they travel another stop or two out of the centre.

“The strongest growth was seen in the predominantly domestic markets of prime south-west London (running from Fulham to Richmond and Battersea to Wimbledon), where annual growth now stands at 8.5%, much higher than the 4.4% seen in prime central London,” said Lucian Cook, who is based in Savills’ Margaret Street office, near Oxford Circus.

“Despite reduced city bonuses, these markets are benefiting from wealth accumulated prior to the downturn, new wealth creation, especially from West End hedge funds, and increased buying activity from international buyers working and resident full time in the capital.

“At the same time, domestic wealth has resisted a move out of the capital in this recovery cycle, resulting in a concentration of demand in prime South West London and similar markets such as Islington.

“The best performing local market has been Fulham, which is increasingly seen as a hybrid between central London and south-west London by showing some of the attributes of both markets at a price point between the two. This reflects the fact that it is undergoing a process of ultra-gentrification, attracting international and domestic buyers who, despite significant wealth, have been priced out of the central London market.”

What is partly persuading people to buy in SW6 rather than SW3 is the arrival of like-minded families with children attending the good local schools.

“West Chelsea becomes Fulham, and lines blur at Parsons Green,” admits Lindsay Cuthill, residential director of Savills’ New Kings Road office.

But if you’re sitting pretty in a £10m+ Chelsea home, you can pour another drink and comfort yourself with the fact that overall in the past eight years you’ve done the best of all, with values still 38% above their pre-crunch levels.

Picture:- Lucian Cook says the world is changing


By Tim Harrison 31.07.13

Relative article: Fulham Market up 15%