Taylor Scott International News
Prices in emerging prime property areas in South West London have remained robust in the first quarter of 2015 despite the uncertainties presented by the election, according to a new index. The top performers in terms of capital growth in the first three months of 2015 was Clapham, up 5.5% after a weaker fourth quarter in 2014, followed by Southfields and Earlsfield, up 2.9% compared to last quarter. The emerging prime index from Douglas & Gordon also shows that investors have been attracted by the strong rental growth and some areas have become hotspots for young professionals and overseas investors and tenants who are drawn to upmarket developments. Investors are continuing to flock to smaller units, particularly flats, and this is due to attractive prices and high yields of 3.7% to 5% compared to 2.2% and 3.7% in prime areas. The index report points out that the Chancellor of the Exchequer’s clear signal in the Autumn Statement that properties under £900,000 would be free of political interference has meant that demand for properties under this threshold has remained strong. When it comes to properties over £2 million there has been little pick up from the second half of 2014 and the report says this is due to the fallout from the overhaul in stamp duty structure announced last year and uncertainties ahead of the election, particularly the potential introduction of a mansion tax if certain political parties come to power. Properties in Putney and Battersea, which saw spectacular growth in 2013 and 2014 thanks to well-heeled families seeking family houses, saw a standstill in prices in the first quarter of 2015. The report says this is because property prices in these areas, which generally have more large properties than flats, are now approaching the politically sensitive £2 million barrier, which is the threshold for the mansion tax if introduced. ‘This quarter’s index confirms that emerging prime has become the sweet spot of the professional private rental sector. One bed flats in the £300,000 price range are one of the best investments, given their protection from political interference and the demand from young professionals who increasingly feel more at home in places like Clapham than Central London,’ said the firm’s executive director Ed Mead. ‘It is very telling that for many buyers, both domestic and overseas, emerging prime areas are achieving a social cachet they’ve have never had. While the pre-election period is causing capital growth of larger properties to pause, we still think there is still some way to go on value,’ he pointed out. ‘For instance in Clapham we see demand continuing in the long term given the amount of undeveloped stock in the area. We anticipate the upward trend in prices to be reinstated if no mansion tax is introduced,’ he added. Continue reading →
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