EC Harris’ report shows a potential 9,000 units delivered in the capital over the next nine years
More than £21bn worth of residential schemes are being planned for London over the next nine years as developers cash in on investors looking for safe havens for their cash.
A report by EC Harris states that there has been what it calls “a surge” in new prime residential development activity in central London.
The report says a potential 9,000 prime residential units are due to be delivered over the next nine years with a value of £21bn, of which 4,000 units worth £8 billion are likely to come to market in 2014-2015.
This figure excludes the value of transactions in the existing properties market and only counts the top slice by value of development in prime central London locations.
The report reveals that the capital’s residential market benefited from both sterling depreciation against key overseas currencies and the continuing political unrest in the Middle East and North Africa region.
These two factors have increased demand for safe havens and many investors have identified the nascent recovery in confidence in London prices as a good investment, particularly as the City of London returns to paying bumper bonuses to bankers.
Mark Farmer, head of private residential at EC Harris said: “We are seeing accelerating development activity capitalising on the current high levels of international demand for prime residential property in London. However in many cases the assumption is that the associated market demand will be insatiable, indiscriminate and unchanged three years from now.
“In reality, strategies for successfully selling units into a much more crowded London residential market and for managing the unique challenges of developing in central London need to be in place before a potential site is even acquired. London will, however, continue to offer opportunity for appropriately organised and experienced developers and those new entrants who seek the right specialist advice and adopt a considered approach.
“Those that try and simply ’jump on the band wagon’ thinking there are guaranteed returns to be had may get burnt.”