Tag Archives: city
Research shows over 35,000 high end home to be built in London in next decade
Over 35,000 prime homes are set to be built in London over the next decade, a rise of 40% compared to 2014, new research shows. The combined sales value of these properties is estimated at over £77 billion, and when combined the total floor space of these homes comes in at over 40 million square feet, far greater than the area of the whole of the City of London at 30.7 million square feet. These new homes, well out of the affordable range, will be built on 196 sites that span the breadth of the city, according to a report from global design and consultancy firm for natural and built assets Arcadis. It says that this ‘significant growth’ on the previous year demonstrates the extent to which the capital’s high end residential market is still viewed favourably in spite of the rapidly evolving UK housing market. The report also says that rising construction costs and growing land values have seen input costs rise, while a softening in demand due to successive stamp duty reform combined with economic slowdown in countries such as China has seen buyer interest ease. As a consequence, some investors may eventually reposition these assets away from prime housing and into premium office space, mixed use or even a greater number of smaller homes as they look to markets that offer a greater margin, it suggests. In terms of location, it is Chelsea and Fulham that have seen the greatest level of investment, followed by the Southbank and around the City, and the report says that this is evidence that the prime London property market is not confined to the West End but is now widely diffused across the capital. Some 10,914 homes are due to be built in Chelsea and Fulham, followed by 8,863 in Southbank, 5,898 in City and Fringe, 1,960 in Victoria and Pimlico, 1,754 in Midtown, 1,600 in Docklands, 1,104 in Kensington, 933 in Bayswater and Paddington, 589 in Mayfair and 427 in St John’s Wood. The total sales value of the homes to be built in Chelsea and Fulham is estimated at £20 billion, in City and Fringe at £7.3 billion, in Mayfair at £6 billion, in Belgravia at 5.6 billion, in Victoria and Pimlico at £5.1 billion, in Midtown at £4.7 billion, in St John’s Wood at £4 billion, in Kensington at 3.7 billion and in Knightsbridge at £2.4 billion. ‘Since around 2009, the value of prime residential property in central London has seen dramatic rises, making it one of the hottest markets in recent memory. So, it is hardly surprising that we have seen ongoing interest from investors all over the world,’ said Mark Cleverly, Arcadis head of commercial development. ‘What is interesting, though, is the continuous geographical spread we are seeing. Prime housing is springing up around regeneration areas and on the outskirts of the financial district, suggesting the days of the West End… Continue reading
Sales of property in prime central London record first rise of 2016
Transaction volumes in central London’s prime property market rose in March compared to last year, the first increase in 2016, new data shows. Sales were driven by buyers trying to beat the 3% stamp duty surcharge but year on year growth slowed to 0.8%, the lowest figure for more than six years, according to the latest report from real estate firm Knight Frank. The incentive to act before the April introduction of the new stamp duty rate on additional homes was one of the reasons Knight Frank sales volumes in March exceeded last year’s figure. This bucked the trend of the first quarter of 2016, where volumes were flat in January and marginally down in February. However, the other factor at play is a marked slowdown in the rate of annual growth over the last 18 months. ‘It is the result of a series of tax changes and a preceding period of exceptional growth, which is also a topic that is increasingly covered by the media. As a result, there is a growing recognition on the part of vendors that the prime central London property market is no longer on the upwards trajectory it was in the years following the financial crisis,’ said Tom Bill, head of London residential research. ‘As vendors become more attuned to current market conditions and adjust asking prices, the effect is to drive demand. Asking prices are typically declining by in excess of 10% to attract price sensitive buyers,’ he explained. Despite the bounce back Knight Frank forecasts a 2% decline in western markets but it predicts a 5% growth in markets east of Mayfair and south of the River Thames in 2016. But growth is increasingly polarised. In higher value western areas around Hyde Park, recent tax changes have had more of a dampening impact. Meanwhile, the opposite is true in traditionally lower value markets including Islington and the City and Fringe. A breakdown of the figures show that prices increased by 8.2% in Islington and by 8.1% in City and Fringe. Price also increased by 3% in Southbank, by 2.9% in Riverside, by 2.6% in Mayfair, by 1.8% in Kensington and by 1.2% in Marylebone. Prices were unchanged in St Johns Wood but fell by 6.8% in Knightsbridge, by 4.9% in South Kensington, by 3.5% in Hyde Park, by 2.5% in Chelsea, by 0.8% in Notting Hill and by 0.2% in Belgravia. Continue reading
Research reveals how much home prices change in London commuter areas
Home owners who work in London can save £3,000 on a property for every minute of commuting outside of the UK’s capital city. New research from real estate firm Savills that looked at 100,000 house sales recorded around 314 stations on the outskirts of the capital found how prices rise as addresses edge closer to the city. It found that for each minute less spent on the train into central London, buyers should expect to pay a further £3,048 to secure the property. The average house price in inner London is £606,000, but by comparison, commuter locations within half an hour’s train ride from London have an average property price of £458,000. Further out the average price is just £337,000 for those with a journey time between 60 and 69 minutes. The most expensive place to buy at the furthest reasonable distance from the city, said to be 60 to 69 minutes commute, was close to Shelford station in Cambridge where the average house price is £622,451. In contrast, homes near Southend Central in Essex which is also just over an hour from London tended to sell for around £188,000, suggesting buyers pay not just for journey time but location too. Moving just 10 minutes closer to London results in a huge difference in price. In Sunningdale in Berkshire, for example, where the train takes 50 to 59 minutes, the average family home costs £930,000. Cutting another 10 minutes off the commute to work brings in Shiplake station in Oxfordshire where houses last year changed hands for around £1 million. The research report points out that house prices in London are currently 2.3 times the UK average, the largest differential since records began in 1973, according to data from the Nationwide. This has led many households currently living in the capital to face a choice of accepting a twice daily train journey, commuting costs and hassle in return for more affordable house prices and lifestyle benefits. Of course, any house price savings must be set against the cost of commuting. An annual rail and underground season ticket now costs from £2,400 to nearly £10,000, depending on length of journey and rail provider. Despite this, savings on house prices will more often than not outweigh the travel costs. An analysis of Savills buyers in the London commuter belt shows 30% of sales over the first quarter of 2016 were to those relocating from London compared to just 23% during the same period in 2015. The firm expects this trend to continue as the ripple effect continues to take hold. Continue reading
