The residential sales market in St John’s Wood, like all sought after areas of central London is fuelling a self sustaining boom. Sales are incredibly strong and prices are growing, but even with all this growth the number of buyers coming in is still far greater than the number of sellers giving instructions. As a result, demand outstrips supply on a continuous basis.
For the most part Central London is now a built up area consisting of high rises. In fact, St John’s Wood is now one of only two places (the other being Hampstead) where you will find streets of low-built houses with large gardens. This is another reason for the massive popularity of the area, and why there just aren’t enough houses to go around — literally. Other areas of London might have 200 flats to a plot that stands 3-5 houses in St John’s Wood — as they say in Holywood you do the math!
It is easy to be fearful of a bubble and start to squeak about a potential crash. However, these top areas of London have now proven their resilience to such events. St John’s Wood is home to some of the most sought after property in one of the world’s top places to live, work and go to school. As long as there is wealth in the world and things like doctors and professors earning a good wage,0 property in such locations will continue to be a sought after and valuable asset.
An asset that may see a drop in its value during a downturn, but that will be among the quickest to return to growth, and that will grow faster and for longer than many others. This is what happened and has continued to happen since the last crash. In the Knight Frank Prime Central London index February 2012 Liam Bailey, director of residential research said of central London:
“Prices are now 8.9% above their previous peak of March 2008 and have risen at a rate almost double that seen in previous upturns. This has been a very strong upturn.
“But we can confirm the strength of St John’s Wood with cold hard data from the Land Registry. St John’s Wood is in the City of Westminster borough of London.
Land Registry data shows that average house prices in the City of Westminster fell for the first time in April 2008 from £604,931 in March to £581,555 in April, and the sustained decline started with a drop from £593,753 to £581,555 between July and August of that year. But prices had started rising again by May 2009 when the average price rose to £526,632 from £517,111 in April. By January 2010 prices were back up to 591,506 and from there returned to the pre-crash level with a growth to £599,766 in February. Prices have been growing ever since and the average cost of a house in the borough is now £683,219.
Because prices are so high, it is generally those who are well off who will buy houses in St John’s Wood and they will usually (especially now) buy without a mortgage. As a result they are less likely to need a quick sale during a downturn. So as homes are rarely sold for a lowered price, property holds its value and grows over the long term.
This is why wealthy people from around the world are currently buying up properties in such locations, as a safe place to store their wealth and a hedge against the world’s financial volatility.