Boom in London property developments predicted
Opportunities to invest in buy-to-let property in London could become more numerous over the coming years due to a predicted boom in residential construction.
According to a study by investment consultancy EC Harris, new prime residential developments amounting to around 9,000 units, worth in the order of £21 billion, are currently on site or planned for delivery in central London in the period up to 2020.
It says that £8 billion of new development could come onto market in 2014-2015 alone, comprising over 4,000 units.
This spike in development is being driven by increased demand, particularly from foreign nationals enticed by the fall in value of sterling compared to many other currencies, as well as the recent geopolitical turmoil in the Middle East and North Africa.
"We are seeing accelerating development activity capitalising on the current high levels of international demand for prime residential property in London," said Mark Farmer, head of private residential at EC Harris.
However, he warned against assuming that demand levels will continue over the coming years.
"In reality, strategies for successfully selling units into a much more crowded London residential market and for managing the unique challenges of developing in central London need to be in place before a potential site is even acquired," said Mr Farmer.
"London will, however, continue to offer opportunity for appropriately organised and experienced developers and those new entrants who seek the right specialist advice and adopt a considered approach," he added.
As well as owner-occupiers, new London properties may also attract attention from those looking to invest in buy-to-let properties, with demand for rented accommodation also seeing significant rises of late.
According to a recent survey by lender CHL Mortgages, a third (33 per cent) of landlords are looking to invest in more properties over the coming 12 months, while 43 per cent say rental demand is now better than six months ago.
Social media