London has experienced explosive growth in recent years, with prices rising by 24% since 2009 and central London seeing even higher appreciation of 47% over the same period. This growth has seen the disparity between the city and other regions growing, with the average detached house in London now costing 75% more than one in the South-East of England.
Central London growth has come largely from a combination of demand from overseas investors looking for a liquid safe-haven for their capital and foreign professionals moving to London for work. The rise in prices in the centre of the city has led to a fall in the family market, with only 20% of purchasers being families and half of these being foreign families. This has led to significant migration of domestic residents from central London. Buyers are choosing to stay in London, but are moving to more peripheral areas to take advantage of greater value elsewhere, while retaining an investment in the capital.
While historically there has been regular migration out of London, since 2002 the trend has grown for residents to move within London rather than move out, with the largest migration being to the south of the city. The number of residents moving between boroughs has increased by 15% since 2004.
With the strength in the London market as it is, 87% of Winkworth agents expect property prices in London to be higher at the end of 2013 than at the end of 2012 and, although the £2million+ segment is vulnerable to further Government intervention, Winkworth forecasts that there will be average price appreciation of 5% in the capital next year.
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