What Makes an Area in London a ‘Prime’ Location?
London is known for its perfect location and luxury living resulting in areas to be considered ‘Prime locations.’
The definition of a London Prime location often varies; the most common by Savills and Knight Frank states that the top 5% of homes by value are considered to be Prime. More specifically, ‘Prime league’ locations are locations where sales are in the £5 million plus bracket and ‘Super-Prime league’ are locations with sales in the £10 million plus category. The top Prime London locations include Marylebone, Mayfair, Knightsbridge and Belgravia. Prime London has become the ultimate market leader.
Characteristics of Prime Locations
So, what does make an area of London ‘Prime’? There are several factors which may contribute:
It is crucial for a central location to have good transport links; for example, Canary Wharf didn’t properly take off until the Jubilee Line was completed and Canary Wharf became more accessible. The better the transport links are in an area, the more accessible the area is for residents and commuters.
The Wealth of the Area
The wealth of an area is a vital characteristic; in particular, these locations are often located a long distance from lower economic regions; the wealthier the area, the higher quality of the housing. Although research has indicated that rental yield is not the main driver behind purchasing an investment property. Prime London markets are driven by the generated wealth of the area and affordability/access to mortgage debt.
When the population increases, people move to more derelict areas. Therefore, areas which were once neglected are likely to become regenerated and establish themselves as a Prime location. Shoreditch, for example.
The area itself is highly important when establishing what makes an area Prime. Areas which have well-known and established features, such as retail and leisure facilities, are likely to be more favourable. Areas which have historical features or unique landscapes are often considered to add to the distinctiveness of an area, making it even more of a Prime location.
Who Buys Properties in Prime Locations?
Property Wire reports that 57% of Prime Location property purchases in 2022 were made by investors. This is because properties in Prime locations resell at a high value making the investment worthwhile. To add to that, the weak pound and favourable exchange rates offer overseas investors more bang for their buck, resulting in these buyers making up a respectable number of London property buyers.
The remaining percentage of buyers in these areas are thought to be those living and working in the city. This is made of up employees of the financial sector as well as those employed within the scientific and technology industries.
Prime Location Important Facts and Outlook
Prime London locations have certainly expanded as once only four locations were considered Prime, including Belgravia, Knightsbridge, Mayfair and St James.
It has been reported that over 85,000 properties in London are owned by overseas investors, tatalling an estimated value of over £45m, with London leading the way on this figure in comparison to other parts of England such as the North East (approx. 6,700) and the West Midlands (approx. 11,700).
JLL has suggested that now is a good time to be investing in PCL (Prime Central London) locations as a 15% rent increase is currently being seen, the highest rise in over 10 years. This is due to a change in attitude in renters who are now more willing to pay higher rents to live within this part of the capital post-pandemic.
In 2022, Savills reported that demand levels remained strong throughout, with November showing the highest level of £5m+ sales in the first three quarters of a year since 2006.
The ‘Super Prime’ market is currently outgrowing that of the PCL market with an annual growth rate of 7.1%. Locations such as Wimbledon and Fitzrovia continue to shine, whilst previously high-in-demand locations such as Belgravia and Kensington are seeing a drop.
The forecast for 2023 suggests that despite the turbulence of 2022, the outlook is fairly positive. Those wealthy enough to afford prime property are in a better position not to feel the negative effects of the cost of living crisis. The chronic shortage of available property plays to the advantage of sellers as competition amongst buyers is likely to be higher. According to the Financial Times, a 6% growth rate is expected for the year ahead.
Galliard Prime Location Properties
Situated in the Prime setting of Soho, TCRW SOHO redefines luxury living. Comprising two buildings made up of 81 apartments and penthouses, a home at TCRW SOHO is highly sought after. Inspired by hotel-style living, each property exudes timeless interiors with softly curved walls and coffered ceilings, adding a unique, modern twist. Several apartments have been interior designed by renowned designers, including Jack Qu, Honky, Coronado and Olivia Alexandra Interior Design, showcasing unique yet classic interiors to each apartment and penthouse, ideal for those seeking flats for sale in a Prime location.
Now sold out, Galliard Homes’ The Chilterns showcases a collection of exceptional properties. The Chilterns is situated in the heart of the prestigious Marylebone on Chiltern Street. The development consists of 44 luxury apartments with a private cinema, gym and spa.
Get in touch with us today to find your slice of Prime London property: 020 7620 1500.