VIDEO: The number of new homes being built in London has soared to the highest level in a decade, driven by a building boom in the outer boroughs as the central core cooled.
Figures from Estates Gazette’s London Residential Research released today show housebuilders started construction on nearly 29,000 homes in 2013 up 42% on the previous year.
This represents a jump of 154% on the low of 2009, and up 6% on the previous high of 2007. The outer boroughs drove the increase with the number of private homes up more than two-thirds on the previous year turning around a 22% decrease between 2012 and 2013. But the inner boroughs rate of housing starts slowed dramatically, from 42% in 2012 to 24% last year.
“It’s like a game of musical chairs, pricing for the inner boroughs is getting over heated so developers are looking for the next opportunity and that’s the fringe of the fringe pushing development into the outer boroughs,” said head of LRR, Nigel Evans.
Evans warned of two scenarios, record price increases in these areas and the threat of massive volatility across both the inner and outer boroughs. “It’s a poker game. London is no longer the domain of cash-rich buyers. The market is becoming more fragmented, more driven by speculators than those looking for a safe haven.
“The danger is they could pull out just as fast as they came in,” he added.
Greenwich registered the greatest number of starts last year at 2,658 new homes, nearly a fifth of all starts in the outer boroughs.
Gareth Jacob, sales and marketing director with Hadley Property Group, which, together with Mace, is developing 645 homes at Greenwich Square in the borough, said it remained optimistic about London.
“We are keen to get more developments out to the marketplace as we believe there are still more buyers wanting to purchase, and we are driving to acquire as many schemes as we can and get them into the market.”
Click on the video below to see analysis of the report and the full interview with Hadley Property Group’s Jacob.
Click here to download a copy of EG’s London Residential Market Analysis
nadia.elghamry@estatesgazette.com
