Prices in City of Westminster Break £1m Barrier for First Time

By Bridging Loan Directory -

HM Land Registry quarterly sales statistics, released today, show continued demand for the world’s premier real estate, with record breaking prices in London Central’s two boroughs – The Royal Borough of Kensington & Chelsea and The City of Westminster.

The average price of a property in Westminster rose by 7% in Q3 2011 to £1,006,407, breaking the £1m average price barrier for the first time. Property prices across London Central* as a whole, rose 8.7% versus the previous quarter (Q2 2011) and 13% versus this time last year (Q3 2010).

England and Wales, on the other hand, continue to show a sluggish performance with prices down by 2%, compared with last year, wiping £5,000 off the value of an average property.

“Average prices in prime London Central now stand over 15% above the pre-credit crunch peak. It is clear that investors still recognise the value of London’s premier real estate as a safe haven investment, as well as a hedge against inflation and politico-economic instability elsewhere in the world. For the time being, Eurozone buyers are likely to be leading the pack. Nevertheless, transaction levels are still down by almost a third against the long-term levels.  This is a symptom of vendors sitting tight, rather than a reduction in buyer appetite, ensuring continued upward pressure on prices” comments Naomi Heaton, CEO of London Central Portfolio.

“There is inherent seasonality within the market, but the traditionally buoyant autumn market has failed to materialise and we do not expect much action in the market for the rest of the year. Investors around the world seem browbeaten by the incessant stream of negative news. From our position on the ground, we can see that many people are ‘taking an early bath’ and winding down for Christmas earlier than usual,” Heaton adds. “This represents, however, an opportunity for the contra-cyclical investor. A reduction in buyer interest leaves greater room for negotiation and deals can be done. We do not anticipate a significant reduction in values, just a collective drawing of breath as we head into the holiday season, which will quickly be reversed as we see the green shoots of spring.”

For those shrewd investors wishing to take advantage of the lull, LCP is now taking subscriptions for their third property fund, London Central Apartments Ltd (LCA), following the successful closes of their first two funds. Hugh Best, Head of Investment Management at LCP, says “Investors are increasingly looking for capital preservation solutions which offer upside potential. There are relatively few places to park your money at the moment where you are unlikely to lose the shirt off your back, but prime London Central residential is one of them. It is blue chip, transparent and tangible, which are first rate attributes in the face of volatility across so many asset classes. London Central Apartments provides investors with the opportunity to access some of the world’s most prestigious real estate whilst benefiting from professional investment expertise and the diversification a portfolio of around 50 properties provides.  It is available for resident, non-resident and non-domiciled investors as well as UK personal pensions (SIPPs and SASSs).”

London Central Apartments – key features:

Target return: 10-13% average annual growth

Target fund value: £50 million+.  Equity Contribution: £30 million, Shariah-compliant structured finance: £20m

Minimum investment: £50,000 (or less, subject to eligibility)

Investment Term: Closed ended fund running for 5 years (with 2 annual options to extend)

Listed on Channel Islands Stock Exchange, domiciled and regulated in Jersey

Eligibility: UK resident, non-resident and non-domiciled investors, SIPPs, SSASs, traditional and ethical investors.

About London Central Portfolio Limited (LCP):

LCP was established in 1990 to provide an end-to-end service for private high net worth clients wanting to invest in the prime London Central bullseye of Kensington & Chelsea and City of Westminster. LCP has access to the entire market and sources and buys the best properties which it will, in turn, refurbish, let to major blue chip corporate tenants and manage for its clients. It uses proprietary financial modelling to determine yields and returns and to evaluate each investment. LCP is a leader in its field and, since 2000, the increase in value of its managed portfolio has outperformed the market growth by over 50%*.  LCP has just launched their third fund, London Central Apartments Limited, following the successful closes of The London Central Portfolio Property Fund in 2007 and The London Residential Recovery Fund in 2010.  The last annual valuation of these funds in March 2011 showed a capital uplift of 26% and 20%, respectively, over the initial purchase prices.

* HM Land Registry for the City of Westminster and the Royal Borough of Kensington and Chelsea, consolidated weighted averages (London Central), which provides the only comprehensive data set on the market.  London Central is an area of six square miles with around 200,000 households. Average prices are over £1million, nearly 4-5 times higher than the UK market.

Disclaimer: Statistics and information have been collated with care but no representation is made as to their accuracy. Statements made are opinions only and do not represent a guarantee or warranty. Persons seeking to place reliance on information provided for their own or third party commercial purposes do so at their own risk.