I have read yet another headline stating that the prime central London market has peaked. While the market has (thankfully) slowed, saying the market has “peaked” implies that prices will decline. This year has got off to a busy start and multiple bids characterise the market, driven by a chronic lack of supply. It is anything but a buyer’s market.
The problem is that the press and even agents tend to overuse the term “prime central London” and so common is the term that it now seems to incorporate pretty much all of Zone 1 these days. Perhaps I am showing my age but once prime central London had defined borders that did not stray outside the so-called golden triangle of the SW1, SW3 and SW7 postcodes. The prime central London creep means that it is now difficult to get a homogenous view of how this market is performing. Belgravia performs differently from Notting Hill. Chelsea performs differently to Mayfair. Completely different factors affect sales in Knightsbridge and Marylebone. Lumping them all together and saying that this is the prime central London market is misleading at best.
More recently, I have seen researchers trying to incorporate areas well outside of what I would consider central into the prime central London markets. Islington may be an established neighbourhood yet it is neither prime nor central. The same can be said of Hampstead. These areas may be affluent and even have some ultra high net worth individuals living there and residents typically use the property as their main abode, will often have a mortgage and – shock, horror – may even have jobs working for corporations they do not own! I suspect these researchers, particularly ones tied to large estate agency firms, try to incorporate these outlying neighbourhoods into “prime London” simply so these offices do not feel left out.
Residents of the true prime central London are above the timberline, so to speak. If mortgage rates go up or the stock market takes a nosedive, these homeowners are not going to be affected. Demand is still very high in Belgravia and Knightsbridge because of political turmoil around the world, punitive tax rates in other countries and because prime central London property is now considered the backbone of any global investor’s portfolio. What Mark Carney does at the next Bank of England meeting, will matter little to them. They operate on a global scale and when they say they want a property in prime central London, leafy suburbia is not quite what they had in mind.Back to News