Construction levels of high end residential in London’s inner boroughs are nearing critical levels warns a report by EG’s London Residential Research.
The London Residential Market Analysis released today shows that construction starts in the inner boroughs rocketed 42% in 2012, higher than the pre-Lehman average, with much focused on super prime residential units in towers. By contrast, in the outer boroughs construction starts are down 22% on the pre-crash average.
Around 20, 000 high end units are in the pipeline in a necklace to the south of the Thames, twice the volume under construction in the inner boroughs in 2012. ‘This has all the hallmarks of a bubble, and we all know what happens to a bubble, “said Nigel Evans, head of London residential research. “We have not seen anything like this in the 15 years we’ve been monitoring the market,’ he added.
LRR’s research shows that with supply in core high end residential areas around Mayfair and Knightsbridge severely constrained, developers have pushed into more untested areas around Vauxhall Nine Elms in an effort to feed the uprecedented demand from international investors.
Evans added that this could lead to a a series of ‘dead zones’ in areas not far enough out to be affordable by owner occupier standards but not close enough to the centre to be considered prime.
Full report available by clicking here.
nadia.elghamry@estatesgazette.com
