Just over one third of properties across prime areas of London were worth £1m or more in September 2011 (34.6%), a figure that had risen to two in five (43%) following average annual price growth of 11.1% in the last quarter.
Properties worth more than £1m are no longer confined to locations in prime central London.
In September 2010, 57.1% of £1m properties were located in the traditional prime central locations such as Chelsea and Kensington, a figure that has now fallen to 52.7% as areas to the south and west of more traditional prime central hotspots see strong price growth.
This brings the average property value in prime London, which covers areas such as Clapham, Balham, Battersea, Barnes, Pimlico, Little Venice and Brook Green to £ 1,292,924.
And the average property value in prime central London, which covers Chelsea, Kensington, Notting Hill, Holland Park and Pimlico is now ££ 1,885,612.
Strong price growth in the past two years has also boosted the number of homes worth £2m in prime London. As a result 18.5% of all homes in prime London are worth £2m or more, compared to 14.3% a year ago, while 35.5% of homes in prime central London are now worth £2m or more.
Peter Rollings, chief executive officer of Marsh & Parsons, said: “After the meteoric price rises seen in prime London in the past few years, the number of property millionaires in the capital has also shot up. Properties no longer have to be palatial to be worth £1m.
“International and domestic buyers have been flocking to prime property in recent years, but this influx of wealth is no longer concentrated in the most central locations. With the supply of homes especially constrained in the central prime areas, wealth has been overflowing into areas like Balham, Clapham and Brook Green.”
The survey highlighted that a healthier balance between supply and demand slowed short-term growth, with 14.7 buyer registrations per instruction in the quarter, down from 17.5 in the previous quarter.
Meanwhile the supply of properties increased by 2% in the quarter, whereas the traditionally sluggish July and August months combined with the Olympics caused total buyer numbers to fall by 14.8%.
Rollings added: “Although the number of homes coming on to the market remains at near historic lows, it improved in the last quarter at the same time as buyer numbers fell back. It’s not yet a buyer’s market, but easing competition has factored into slower quarterly price growth.
“Buyers are spending more time educating themselves on the current market and stamp duty developments, rather than acting with urgency. Properties need to tick every box – not to mention be correctly priced – to convince the more speculative buyers to make a move quickly.”