{"id":22967,"date":"2016-08-15T21:32:37","date_gmt":"2016-08-15T14:32:37","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=22967"},"modified":"2016-08-15T19:46:26","modified_gmt":"2016-08-15T12:46:26","slug":"london-property-firms-face-falling-demand-for-new-builds-while-prime-homes-add-sheen","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/london-property-firms-face-falling-demand-for-new-builds-while-prime-homes-add-sheen\/","title":{"rendered":"London property firms face falling demand for new builds while prime homes add sheen"},"content":{"rendered":"


\nWhile developers in London are still piling into what has long been seen as the gold-plated certainty of property in the capital, some may be heading for a nasty surprise as high-end new-build homes start to lose their lustre for overseas investors.At the same time, the traditional haunt of the mega-wealthy housebuyer – prime central London – remains at the vanguard of property investments and may well be shining even more brightly.New analysis of data from the market specialists Lorema and Land Registry by London Central Portfolio (LCP) has shown a deepening new-build crisis in Inner London as oversupply and overcrowding begins to haunt the region, which includes Camden, Tower Hamlets and, for the purpose of the LCP analysis, Wandsworth’s Battersea Nine-Elms area. “In light of the plethora of tax hits over the last few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority buyers of new developments, may finally be turning away,” said Naomi Heaton, the chief executive of LCP.And the crisis could well have a negative effect for existing property owners in these areas, with the value of their homes likely to take a significant hit, she said.The number of new developments approved for construction has surged again this year and there has been a 20 per cent increase in the planning pipeline since 2013, representing 106,208 new units. This pipeline is largely made up of projects in the “mega cluster” areas around Tower Hamlets and south of the river in the Battersea-Nine Elms stretch, where there is already a proliferation of new developments. “In the cluster areas, this could have a detrimental knock-on effect for existing homeowners, adversely impacting the value of their own homes as well as the economy as a whole, if the [government] tax take in all likelihood diminishes,” said Ms Heaton.Henry Pryor, an agent who acts on behalf of wealthy buyers, told the Financial Times as early as July last year the Nine Elms area was getting over-built. “It’s a dog-basket of developers all whacking stuff up, all jam-packed against each other, and walking out of the door and trying to find a pint of milk is really hard,” he said. “Looking at what’s coming out of the ground, I wouldn’t want to live there and not many people we talk to want to buy down there.”In Tower Hamlets and Battersea-Nine Elms this year, a further 33,239 and 18,665 units, respectively, are now scheduled to be built. That is likley to exacerbate the problem Ed Mead, a director of estate agent Douglas and Gordon, also told the FT about last year. He said then that valuations were already “getting a bit silly”. Prices were “wildly out of kilter with what homes in the surrounding areas are selling for”, he added.It seems his and Mr Pryor’s views were prescient. Despite the ever increasing number of new developments, the statistics have shown that the attraction of these new properties, where prices now average \u00c2\u00a3914,532 (Dh4.3 million), is waning. According to LCP’s analysis of the Land Registry data, only 1,491 new units have been sold so far this year, a 43 per cent decrease on this time in 2015. This compares with older properties in Inner London where transactions have remained static, 13,194 in 2016 compared with 13,190 over the same period last year. Bringing more bad news for developers, square-foot prices have also fallen for new properties. Across the Battersea-Nine Elms stretch, prices are down 8 per cent per cent on their 2014 high. This is in stark contrast to London as a whole where prices are up 23 per cent.New applications have also rocketed. Applications for 17,494 new units including 111 towers (buildings over 20 storeys) have been submitted, a 27 per cent increase on 2013. This is equivalent to one new tower application every three days, of which 90 per cent are located in Tower Hamlets and Battersea-Nine Elms.”History demonstrates that a saturation of over-priced commodity-style property leads to softening prices, particularly during times of economic uncertainty. In Tower Hamlets, for example, which undertook an extensive building programme before the global financial crisis, prices took six years to reach parity with their pre-recession level,” said Ms Heaton. However, in prime central London (PCL) – representing Kensington & Chelsea and the City of Westminster and where there is very limited new build due to the conservation of its architectural heritage – prices had bounced back by 2010, Ms Heaton said. She added that is also the case this year. “In a similar fashion, we are again seeing today ‘business as usual’ for older stock.”According to LCP’s research, just 271 new build sales have been recorded in PCL in the first six months of this year. This limited new build potential protects PCL from the new-build crises elsewhere, which are having a notable drag on headline average prices for London, as reported by the Royal Institute of Chartered Surveyors last week. In prime central London sales activity has been normal this year, with 2,606 properties sold to date, on track with the long term average of 5,213 a year since the financial crash.”While no concrete evidence of post-Brexit market dynamics has yet been published, we expect PCL real estate to respond in a broadly similar way as it did during the financial crisis when the market out-performed almost all other asset classes,” said Ms Heaton. “A flight to quality and the security of blue-chip tangible assets will be underpinned by the continuing weakness of Sterling. Alongside this, the attractions of PCL as a centre of culture, excellence and education with absolute rule of law and unequivocal title to property remain undimmed.”We firmly believe that these robust market fundamentals will support continued asset appreciation particularly in the mainstream private rented sector. LCP has already seen a fivefold increase in investment enquiries since the vote,” said Ms Heaton.For the rest of Inner London, however, falling sales volumes in new developments and the exponentially increasing number of such schemes creates an increasingly worrying picture. “With 51,904 new units slated for Tower Hamlets and Wandsworth alone, this will take a heavy toll on these areas where there is already extensive oversupply and the buying pool is shrinking thanks to ever more tax hikes,” said Ms Heaton.business@thenational.aeFollow The National’s Business section on Twitter
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\nSource : thenational.ae
\nRead more…London property firms face falling demand for new builds while prime homes add sheen<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

While developers in London are still piling into what has long been seen as the...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-22967","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-5Yr","jetpack-related-posts":[{"id":11548,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/prime-london-rents-exceed-100-a-day\/","url_meta":{"origin":22967,"position":0},"title":"Prime London rents exceed \u00a3100 a day","date":"June 29, 2015","format":false,"excerpt":"\r The average rent on a two-bedroom flat is \u00a3707 a week, says property investment firm, with corporate demand and international students fuelling a rise in prices Tenants in London\u2019s most upmarket neighbourhoods are paying more than \u00a3100 a day to rent two-bedroom flats, as increasing numbers of students and\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7084,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/glut-of-new-build-properties-leads-to-falling-premiums-in-central-london\/","url_meta":{"origin":22967,"position":1},"title":"Glut of new-build properties leads to falling premiums in central London","date":"March 7, 2016","format":false,"excerpt":"\r Property investment firm LCP warns of bubble in new-build market, with the risk of oversupply suppressing yields and pricesPrices for luxury flats in some parts of London are likely to fall as an oversupply of properties erodes the premium being paid for new-builds, an investment firm said on Monday.The\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":88185,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/construction-of-central-london-new-build-flats-fell-by-a-quarter-in-2017\/","url_meta":{"origin":22967,"position":2},"title":"Construction of central London new-build flats fell by a quarter in 2017","date":"May 14, 2018","format":false,"excerpt":"\r Apartments housed in developments dubbed \u2018posh ghost towers\u2019 struggle to sellConstruction of luxury flats in central London dropped by a quarter last year, with apartments housed in developments dubbed \u201cposh ghost towers\u201d struggling to sell. 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After studying at Oxford University she held directorships at two major advertising agencies, including industry giants Saatchi and Saatchi, where she was the company\u2019s youngest ever female\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":21576,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/uk-property-prices-questioned-on-concern-government-is-rewriting-history\/","url_meta":{"origin":22967,"position":4},"title":"UK property prices questioned on concern government is 'rewriting history'","date":"August 1, 2016","format":false,"excerpt":"\r The accuracy of new UK government data that suggests the average price difference between property in London and that outside the city has closed significantly has been called into question by a property investment services provider that claims the government has \"rewritten history\".London Central Portfolio said the figures show\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":53485,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/luxury-london-property-a-growing-headache-for-foreign-investors\/","url_meta":{"origin":22967,"position":5},"title":"Luxury London property a growing headache for foreign investors","date":"May 2, 2017","format":false,"excerpt":"\r For overseas investors in luxury London developments, tumbling sales and slowing value growth of new-build and established homes makes for dismal reading - and it does not look like improving any time soon.Years of overpricing is hurting the market in ultra-prime areas such as Mayfair, while new luxury developments\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/22967"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=22967"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/22967\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=22967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=22967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=22967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}