Prime central London may not seem to most obvious part of the UK for buy to let investors but a leading lettings agent admits there are bargains to be had.
Research by Benham and Reeves has revealed that prime central London properties on the sales market - and these possible landlord purchases - are still being discounted to the tune of £25,000 on average.
The analysis of prime market data shows that in the current market, prime London properties are being discounted to the tune of 3.6 per cent before securing a buyer.
However, this adjustment to asking price expectations is starting to reduce, down from 4.5 per cent a year ago when high-end sellers were accepting discounts of £56 per square foot - £29,418 on the average flat.
Prime home sellers are currently accepting the largest discounts in Mayfair and St. James’s, where the average homebuyer is securing a 7.9 per cent discount, equating to £94,062.
Marylebone and Fitzrovia, Bloomsbury and Soho also rank amongst the areas where prime homebuyers are securing the biggest discount, with savings being made to the tune of £42,763 and £40,581 on the average prime flat respectively.
While prime London properties are still being discounted across the board, 14 of the 20 areas analysed have seen the size of this discount reduce in the last year as demand has returned to London’s top tier.
In Bayswater and Maida Vale, the average prime flat was seeing a discount of £36,081 a year ago. This has since dropped to £19,638.
There are six areas of the prime London market where this property price reduction has increased.
In Kings Cross and Islington, homebuyers were securing discounts of £1,685 on the average flat just 12 months ago. This has since climbed to £4,853.
There has also been an increase across Hampstead, Midtown, City and City Fringe, Marylebone, South Kensington and Fulham and Earls Court.
The director of Benham and Reeves, Marc von Grundherr, comments: “The prime London market is yet to fully find its feet following a rather sustained period of muted house price performance, spurred initially by the political uncertainty of Brexit, followed by the impact of the pandemic and restrictions to foreign travel.
“However, it now certainly seems as though the tide is starting to turn and we’ve seen a growing revival of buyer interest across London’s top tier property market.
“So while sellers are still offering discounts in order to secure a buyer, the extent at which they are having to lower their expectations is reducing and this is a trend that is likely to continue as the year goes on.”