Strutt & Parker’s latest UK residential quarterly report highlights the stark contrast between the property market in Prime Central London (PCL) and the rest of the UK – in terms of house prices, nationality of buyers and behavioural patterns.

Buyers in PCL have become increasingly international; almost 44% of all Strutt & Parker’s London buyers were foreign in 2013, while the rest of the country has remained overwhelmingly domestic, with just 5% of buyers coming from overseas.

Stephanie McMahon, Head of Research at Strutt & Parker, said: “We have seen Chelsea, South Kensington and Fulham assemble the most diverse spectrum of international buyers, while Knightsbridge is highly attractive to those from the Middle East. Kensington & Notting Hill has changed from being a more domestic market to an overseas hotspot.”

House prices show a similar picture with the PCL market being fuelled by overseas money. Land Registry figures for 2013 show that the median house price for England and Wales has increased annually by just shy of 1% to £168,000, while in Greater London the median price has increased by 6.7% and is now nearly £320,000. Interestingly, Strutt & Parker saw a very high proportion of cash purchases in the PCL market, nearly 67%, as foreign buyers tend to leverage post purchase.

However, the disparity between PCL and the rest of the UK is not just confined to house prices and nationalities of buyers. Behavioural changes were also recorded by tracking the motivations of its buyers and sellers throughout 2013.

52% of Strutt & Parker’s buyers in London are seeking property for their primary use, while this figures jumps to 87% outside of London. Investment properties outside of London also remained low, at just 4.8% of purchases made, with far more buyers seeking primary and secondary homes.

The main driving factor behind those selling in PCL was for financial reasons at 24%, while in the country this figure drops to 12%. In the capital, 56% of buyers want a flat, whilst in the country a significant 90% are looking for a house. Finance was the top job sector amongst those choosing to sell through Strutt & Parker.

Strutt & Parker’s nationwide outlook for 2014 remains buoyant in both London and across the country. Stephanie McMahon, Head of Research, explains: “We expect UK house prices to grow by 7.0% across the UK in 2014, and 6.0% in PCL. During the latter part of 2014, we expect that price growth in 2014 will be more sensitive to prevailing political press and expectations due to the election - and this will be even more pronounced in 2015. However, the continuation of strong growth through the end of 2013 suggests the downward pressure might be less substantial in both of these years. On top of this, we expect sustainable growth to return through 2016 and 2017.”

Michael Fiddes, Head of Regional Residential Agency, adds: “We are starting to see money percolate out of the capital as the divergence in ‘value’ between the capital and the rest of the country has never been so great.”