The Race For Space

Updated: Apr 26



An "Englishman's home is his castle" is an often used phrase when it comes to the British property market. However it looks like the events of 2020 have brought new meaning to this concept as property owners sought more space to enable them to work from home and enjoy the sanctity of a garden, patio or roof terrace. Using data provided by LonRes we have looked at how sales values for houses and flats in the prime areas of Central London changed over the course of 2020 as well as the premium buyers were willing to pay.


Prime London Property Performance by Type


The table below shows the price growth of houses versus flats over the course of 2020 across Prime Central London, Prime London and Prime Fringe London. For obvious reasons houses significantly outperformed flats, with PCL flats being the worst performer as the international travel ban, a lack of overseas students and the obliteration of the short-let/AirBNB market took its toll. Unsurprisingly it was Prime London houses that performed the best with more leafy areas such as St John's Wood, Hampstead and Notting Hill performing particularly well:


The Premium For PCL Houses Almost Doubled in 2020


It's also interesting to look at how much more PCL buyers are prepared to pay for houses over flats and what this looks like in a historical perspective. The chart below shows the premium paid for houses over flats since 2014 and compares it to 2020. In the 6 years prior to 2020 buyers pretty consistently paid around a 10% premium for a PCL house versus a flat. In 2020 this premium almost doubled to 18%:


Space Premiums and Opportunities


Helpfully LonRes also breaks down the performance of houses and flats by local area and using the same methodology as above we can see where the market has effectively priced-in a large "space premium" (compared to historic norms) and where the market has failed to do so - potentially creating a buying opportunity. Again its unsurprising that leafy areas like St John's Wood, Regents and Park Primrose Hill top the list whereas the more overseas buyer/tenant dependent areas such as Mayfair, St James and South Kensington are towards the bottom. However what about leafy areas such as Richmond, Kew, Sheen, Chiswick, Hammersmith where the premium for houses vs flats remains in line with historic norms?

And lastly, it will be interesting to see if this elevated premium for houses in certain areas is sustained or whether the market has thrown-up good opportunities for flat buyers in more central areas who are prepared to swim against the tide. Time will tell ...


Fraser Slater

Chief Executive of Ludgrove Property Ltd

43 Berkeley Square

Mayfair W1J 5AP

Tel: +44 (0)207 889 2860

Email: info@ludgroveproperty.com

Web: www.ludgroveproperty.com



About: Ludgrove is a research-driven London & Home Counties property buying agency, sourcing properties for home-owners, investors, family offices and developers. The agency is ranked as one of the UK's top buying agencies by Spears, Prime Resi & EPrivate Client. Ludgrove is also the only UK buying agency that conducts in-depth research into the Prime London property market and their research regularly features in The Times, Forbes Magazine, Property Week, PrimeResi, Mansion Global and others. As well as conducting searches for homeowners, Ludgrove sources and appraises off-market apartment blocks and development opportunities, adding considerable value to Investors and Developers. CEO and Founder Fraser Slater is a former Real Estate Analyst and Fund Manager. His former equity fund WDB Capital was one of the best performing Funds in Europe during the Financial Crisis. Co-Founder Isabella Slater is an interior designer.


Please call us on +44 (0)207 889 2860 or visit www.ludgroveproperty.com to find out more.

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