House prices may be falling elsewhere, but the community appeal effect is driving the prime London market upwards
Apologies in advance because to some this piece may not make comfortable reading.
Every periodical I pick up, including this one, spreads the word that the market is awful and prices are dropping quicker than Nick Clegg’s popularity rating.
But there’s a little enclave where this isn’t the case and fortunately it’s where I have my professional being.
You won’t read about it in The Sun as it would rather tell you about Rochdale being the benefit capital of Britain.
I am, of course, talking about prime central London where things are booming right now.
When I say prime I don’t just mean the big five of Kensington, Knightsbridge, Belgravia, Chelsea and Mayfair because in this sense the word prime is misleading.
As any central London agent will tell you, prime really means anywhere within five or six miles of central London, which is both good and bespoke and where demand outstrips supply.
Google ’prime London’ and places like Hampstead, Wimbledon village, Barnes or Bedford Park won’t pop up, but these are all just about as prime as you can get. And why, I hear you ask?
Supply and demand is the answer. In London there is finite stock having to supply increasing demand, of which 80% are foreign buyers at the moment.
Finite stock is having to supply growing demand, of which 80% are foreign buyers at the moment
The Americans love to live in St Johns Wood because that’s where The American School is. The super-rich Russians want to live in Knightsbridge, preferably within walking distance of Harrods and the French always want to buy in south Kensington near the Lycee Francais School.
This community appeal effect is something that is often overlooked in London, but it is one of the driving forces which is pushing the prime London market upwards.
This phen omena isn’t confined to the centre of town either. There is a huge Jewish community in and around Golders Green in north London and not far away is where Greeks and Turks have settled.
A walk through Stockwell in south London will take you into an area known locally as Little Portugal because London’s Portuguese population lives there.
And similarly, the biggest concentration of Koreans outside Korea is in, of all places, New Malden – again in south London.
So what you have in our capital city is a collection of separate communities which foreign nationals eagerly want to buy into.
London is unique as I explained last week at length to the chief executive officer of a major foreign bank.
How can a property worth £20m be in the same postcode and within a few minutes walk of something worth£300,000, he mused. Because this city has developed piece meal thanks to the Great Fire and the Blitz and a lack of an overall plan, I told him.
What it isn’t is a town with street upon street of identical purpose-built flats all worth the same. I think he got the picture, but I’m not sure.