Savills Research on The evolution of prime London
Mapping the expansion of prime London from 2003 to 2018, words by Sophie Chick
Since the downturn, London’s housing market has led the recovery, particularly in the prime locations. Demand for property in the capital has soared and with it has the number of £1 million+ sales, increasing by 165% over the five years to 2013. Popular locations in East London, such as Dalston, are beginning to break the £1 million barrier as are an increasing number of locations in the South East, such as Streatham and Herne Hill.
Development activity in the prime markets has picked up significantly with nearly four times as many new build £1 million+ sales than in 2008. This is particularly evident in the City with popular developments such as The Heron, Arthouse, Wardour Street and Sterling Mansions seeing high levels of demand from both international and, increasingly, domestic buyers.
Over the next five years (2014 to 2018) we are forecasting that all prime London property will see price rises of 23%. Using this forecast, we have mapped all the properties which sold in 2013 that will be over £1 million by 2018 as an indication of where the next prime locations will be.
This method indicates that the rate of expansion in prime London will slow slightly in comparison to the previous five years. Still, £1 million+ transaction volumes are expected to rise significantly, by 47% over the next five years.
The majority of the new locations are neighbouring areas to those that are already prime, such as Earlsfield and Brixton. Both Wanstead and Southgate are expected to appear as new prime locations in outer London as values here reach the £1 million mark.
The map now shows the emergence of a third ‘wealth corridor’ as and when homeowners move out of the centre of London. The south west path has long been established, but the route north only became visible in 2008 and filled in over the next five years.
The next wealth corridor running south east brings in Dulwich and Bromley, which become more connected via locations such as Crystal Palace and Shortlands. Inevitably, there will be other locations that emerge as prime, either by becoming more fashionable for wealthy younger households or via regeneration.