Houses in London’s prime suburbs have been holding their value more strongly than flats during the coronavirus outbreak as buyers reassess their lifestyles and search for more space.
During the second quarter of 2020, the average outer prime London house value slipped by 0.5%, while the average flat price was down by 1.6%, real estate adviser Savills said.
This bucks a general trend seen over the past five years, where flats have, on average, tended to out-perform houses.
Outer prime London covers areas such as Wimbledon, Putney, Clapham, Richmond, Islington, Hackney and Hampstead.
Savills’ research looked at the performance of the top 5 to 10% of the housing market by value over the past three months.
Across the prime London market, 97% of Savills’ agents reported an increased demand for homes with a garden or outdoor space, 82% have seen more demand for a separate place to work from home, and 71% report the appetite to be near to a local park has grown.
Savills also found evidence that a growing number of people are looking to buy top-end properties away from London.
We have been surprised at the extent to which lockdown has made people reassess their housing needsLucian Cook, Savills
More than four-fifths (83%) of Savills’ agents reported increased demand for village homes, and 90% greater demand for country locations.
Across its offices, staff have reported an uptick in buyers from London – with nearly a third (32%) of new applicants in the country coming from London compared with 21% last year.
“Market activity has been buoyed by pent-up demand, in part at least, but we have been surprised at the extent to which lockdown has made people reassess their housing needs and, more pertinently, act upon it,” said Lucian Cook, Savills’ head of residential research.
“This said, buyers appear to be keeping their feet on the ground when it comes to what they will pay, meaning sellers must retain realistic price expectations if this momentum is to be sustained.”
In central London, where restriction on international travel has constrained demand from overseas buyers, prime property prices fell by 1.2% over the quarter, Savills said. Prime central London includes Kensington, Mayfair, Notting Hill, Westminster and Knightsbridge.
Another estate agent, Hamptons International, has also reported seeing a growing proportion of London buyers looking to move elsewhere in southern England.
Data from its parent group Countrywide shows nearly one in five (19%) applicants who registered in a southern branch were from London in May, up from 13% in May 2016 when moves away from London last peaked.
Broxbourne, Epping Forest and Dartford are among the places with strong interest from people currently based in London, its research found.
The proportion of applicants from London who registered to buy a home in the Midlands or North has remained “pretty flat” at 4% and 2% respectively, it said.
The average Londoner looking for a home outside the capital had a budget of £422,000, but 5% have a budget of £1 million-plus, Hamptons said.