The UK capital is looking at a possible surfeit of expensive newly built homes.
Figures from Lonres, Dataloft and Property Vision show some 54,000 properties are either planned or under construction in the area from Earl’s Court and Regents Park to Tower Bridge and the South Bank, most of which will be priced around £1m. Demand could be an issue, however, with only 3,900 similarly priced homes sold in those areas last year.
Property Vision’s founder, Charlie Ellingworth, warned that investors are unlikely to see the kind of returns they may have been led to expect – anyone looking to make a return of 3% to 4% on a £1m property would need to be charging rent of £30,000-£40,000 a year, he noted.
Despite this, demand for land for development has jumped, with data from Knight Frank showing prices for central London land up 25%.
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