A global centre for commerce, business and culture, London is known for having one of the most fast-moving property markets in the world. Recent years have seen a rollercoaster of activity, with a construction boom, increasing overseas investment and rising property prices, making for a constantly changing and competitive market. While the pace doesn’t show any sign of slowing down, there are some definite emerging trends to keep an eye on that will affect the makeup of the central London property market in the coming years.
For starters, many developers are building upwards. According to a report by New London Architecture, a think tank based in the United Kingdom, there are plans for more than 230 new buildings that are each over 20 storeys high. This includes 70 that are being built this year, with close to 200 to be completed within the next decade. Currently, London is a low-rise city, with skyscrapers concentrated in only a few areas, such as Canary Wharf and the City. Not only will this change London’s iconic skyline, but it will also increase the density of more central parts of the city.
There has also been a shift towards larger units with a higher number of bedrooms. Previously, many buyers looking in central London wanted a pied a terre, a place they could stay during the working week, before returning to their normal home on the weekend. Now, however, many want a spacious property to make into their permanent residence. For instance, according to a report released by Pastor Real Estate, the average size of studio apartments currently in planning stage is 763 square foot, compared to 543 square foot for those already under construction – which is a substantial increase of 40.5%.
Moreover, all developments currently planned in Mayfair, Belgravia, Marylebone and Knightsbridge include two bedroom properties, up from 88% in those already under construction, while 71% are incorporating three bedroom homes. Space already comes at a premium in central London. The push to provide more space in each property could result in the price per square foot reaching much higher rates as the competition intensifies. It may also encourage more developers to develop brownfield sites or build high rises.
Alongside providing more space, a focus on high-quality specifications is another key trend that will impact what kind of properties we’ll see in prime areas of central London in the future. Developers are not just selling a home, but also a lifestyle – providing luxurious interior design, turnkey properties and on-site conveniences are another way of setting properties apart from the rest of the competition, and there is plenty of that in central London.
As of April 2015, there were 277 developments under construction or in planning stages within the prime regions of central London, delivering a total of 7,179 units. The bulk of activity is taking place in W1 and SW1 postcodes. But even the types of properties planned in these areas are showing differences. The W1 area, which includes Mayfair, Marylebone and Fitzrovia, accounts for 55% of schemes and 36% of units, showing that more spacious homes are important here. As for the type of properties in the pipeline, approximately 75% of current developments are new builds. The other 25% is composed of refurbished period properties, as well as those retaining just the façade of the former building. While London is known for its beautiful period architecture, primarily Victorian and Georgian, there is a certain prestige for buyers looking at ultra-modern, entirely new residences.
By Lefteris Eleftheriou Exclusive to TheTopTier