Southwest London isn't usually the first place that springs to mind when one ponders the most affordable areas of the capital. The area conjures up idyllic visions of jogging in Richmond Park, overpriced brunch spots and Lululemon-clad yummy mummies chugging green smoothies while pushing Bugaboos.
But maybe millennials shouldn't discount the area completely when thinking about where they might want to live, new figures from estate agent Savills suggest. House prises in prime southwestern locations, including Wandsworth, Clapham and Richmond, are dropping faster than those in central London for the first time since 2012.
Property values in the area, which also includes Battersea in the south and Fulham and Barnes in the West, fell by an average of -1.6% in the last quarter of 2017, and by a substantial -4.2% over the whole year, making the region London's "weakest prime market segment", Savills said.
Over the same period, the average price of prime central London properties, which have seen a well-documented drop since the Brexit vote, fell by -0.9% and -4.0% respectively. Wealthy investors have become less willing to put their money into high-end areas like Knightsbridge, Mayfair and Holland Park.
Savills said southwest London property prices in particular were also suffering from Brexit uncertainty, as well as mortgage restraints and concerns over future interest rate rises. It singled out Fulham as the area which has seen the steepest decline in prices.
Property prices in Fulham fell by -4.6% in 2017, which is more than a 14% drop on their 2014 peak. While this doesn't make the area affordable in most millennials' sense of the word – studio flats start at around £285k and a large family house can cost over £5m – the downward price trend is positive for those eventually hoping to get on the housing ladder in the capital.
Savills said Fulham's price falls “effectively reposition [it] as a value location for those looking to make their equity stretch further than in prime central London”.
Lucian Cook, the company's head of residential research, said it expects "continued weakness in price performance in key outer prime London markets", like southwest London, this year. "These markets are much more dependent on domestic wealth generation and access to borrowing than prime central London."
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