When buying property in London, research is fundamental to ensuring that you make a wise investment. One aspect that is important to understand is what the future make up of London’s property market will look like.
We can then see how developers are responding to what buyers want and, from here, subsequently work out what is in demand and what type of property will offer the greatest return in the future. Mayfair-based Pastor Real Estate has recently released a report with an in-depth analysis of the residential development market in central London, which reveals some of the key emerging trends.
Construction is increasing in prime areas of central London. As of April 2015, in central London 277 developments were under construction or in planning stages, comprising 7,179 units. Compare this to the six years since January 2009, when 144 developments were completed. This signifies a massive increase in construction, with twice as many schemes and three times as many units in the pipeline now. Moreover, construction is taking place more in the prestigious central London areas than other regions of the city. Since 2009, central boroughs have recorded 8.6% more housing stock, compared to 4% for other regions of the inner city and 2.9% for the city as a whole.
The dimensions of home being built are changing, too. Properties are getting bigger and including more bedrooms. The average size of studio apartments in central London (www.visitlondon.com) has increased by 40.5%. Studios in the planning stage at the moment average 763 square foot, while those already under construction come in at an average of 543 square foot. For one and two bedroom units, the figures stand at 43% and 18% respectively. All developments currently planned in Mayfair, Belgravia, Marylebone and Knightsbridge include two bedroom properties, up from 88% in those already under construction. In addition, 71% of developments are incorporating three bedroom homes. The number of schemes offering one bedroom apartments is falling, from 75% among those under construction to 67% for those at planning stage.
It is also worth exploring the types of developments appearing. Approximately 75% of current developments are entirely new. The other 25% is composed of refurbished period properties, as well as those retaining just the façade of the former building. However, refurbishments are becoming increasingly popular in the most recent planning permissions, even outnumbering new builds, according to the report. This could be indicating that the space available for building developments is decreasing, however, period homes are highly desirable, and in some cases offer completely unique accommodation.
While it is useful to have an overall picture of what changes are happening, it is important to find out the more localised trends. The W1 region accounts for 55% of all proposed schemes in the prime areas of central London and 36% of proposed units, while SW1 records 33% of schemes and 44% of units. The average size has increased across all areas, however, Mayfair and Knightsbridge are witnessing the largest unit sizes in the development market. The average size of three bedroom apartments in Knightsbridge comes to 4,700 square feet.