In the same week that Savills announced the polarity of pricing even within Prime Central locations, the prospect is good for new London development projects and second hand stock outside of PCL, as 2012 pricing predictions for property within the capital continue to rise, according to Urban Exposure’s Adrian Mediratta: “this demonstrates the rippling effect that is occurring in London right now”.
According to the Financial Times, the outlook for new build properties in the Capital is good, with a range of schemes due to commence next year that will see the regeneration of a number of London boroughs and improvements in transport links. Demand continues to outstrip supply, as stock remains low and buyers are in abundance, property shortages still remain:
“Across the capital, planning has been granted for 214,825 units, but Knight Frank estimates that 374,111 households will have been created or moved into the capital by 2020. Even if there is a sharp pick-up in planning consents and building, agents argue that developers will struggle to eradicate the current implied 42 per cent shortfall in housing.”
With the continued rise in house prices around prime central locations such as Mayfair, which according to Savills, has demonstrated price growth of more than 117% since 2005, and Knightsbridge leading the prime markets with an average price of more than £2,000 per square foot, new build schemes within the capital are also providing substantial additional premiums for developers and investors outside of the elite postcode catchment areas.
As Knight Frank’s Liam Bailey told the Financial Times in a recent interview: “House building in London has picked up sharply since the financial crisis” and it continues to proliferate with a number of high profile developments taking place across the capital, in and outside of PCL markets. As Urban Exposure’s Adrian Mediratta goes on to explain:
“Those being priced out of the most in demand areas are now looking further afield into other London Boroughs; this is good news for London, and also for commutable towns outside of London.”
Adrian Mediratta is a Director at Urban Exposure who provide market leading mezzanine and structured finance.
http://www.urbanexposureuk.com/en/finance/mezzanine-finance/