2012 looks set to be a fascinating year for the West London property market. With so many variables, it is impossible to predict with any degree of certainty the parts of West London that are going to become desirable, and which parts are priced-out of any potential upsurges in demand. Much of the property market will be influenced by how the broader British and global economies evolve over the upcoming twelve months, and how this affects migration patterns both domestically and internationally. On top of this, there is always the possibility that changes in government policy could cause significant shifts in the market. However, without knowing how the economy is going to develop, we still need to be able to observe more general trends that have been in place in recent times.

If recent performance is anything to go by it is clear that South-West London is going to experience more growth in property prices. In 2011 house prices all over the South-West of the capital grew significantly more than both the regional and national averages.  The reason for these price rises is clear: there is a genuine increase in demand for properties in that region of London. The price increases so far have tended to be particularly striking in the area between Battersea and Kensington. In these places, demand has come from two groups; a new groups of professional first-time buyers who tend to be over 30 and are seeking to move out of rented accommodation, and private investors buying properties in the area attracted by the lucrative rents obtainable in the South-West.

The area in which price rises significantly outstrip the national average and is likely to increase more is west of Kensington, and south of Battersea. This is a natural progression as house prices in the periphery of these in-demand locations have become slightly undervalued when compared to their more central neighbours. It is therefore likely that as the pull of the South-West increases, the area deemed desirable increases in size. In particular the area between Battersea and Tooting will likely increase in value to keep pace with the 2011 price rises in Battersea and Kensington.

Property prices in Ealing are likely to experience steady growth as well. Investors will be willing to utilise their capital in this area of West London because the returns on rent here are strong in relation to property prices. As a favourite amongst commuters, Ealing will see steady growth, but price rises are unlikely to reach the levels of Battersea and Kensington due to the desirability of SW postcodes.

Growth in the western areas of Richmond and Kingston are likely to be more subdued. Many potential buyers in this part of London rely on savings as a source of income, and with low interest rates likely for the rest of 2012, it is unlikely that such buyers will be willing to invest their savings at this time. On top of this, the region mentioned has a lower demand for properties to rent, meaning that it is unlikely that investors will move their capital so far West. The lower returns for those buying-to-let is a substantial cap on any growth that may come in 2012, as people continue to struggle to obtain mortgages due to the unwillingness to lend by the banks. The West London property market will broadly outgrow that of the rest of the UK, but the precise amount of growth will be dependent largely on exterior economic factors.