The Central London residential development market has changed dramatically during 2014.
The heady days of price bubbles and overheating markets of earlier in the year are now behind us. But what remains is a far more realistic and sustainable marketplace.
Since the beginning of the year, residential capital market investors have remained highly active due to the UK economy’s recovery and the continued mismatch in demand and supply dynamics.
The residential land market in Central London has appeared unstoppable in the past four years, fuelled by demand from all parts of the globe.
Land values way above peak
Whilst the UK economy only passed its pre-crisis peak this year, Central London land values surpassed their previous high as far back as 2012.
The land market is characterised by an increasing pool of diverse operators, refinanced housebuilders and private equity funded niche developers, which has led to a rather crowded marketplace.
The next 12 months are likely to be characterised by more overseas developer interest, especially from China. Their arrival should be welcomed as they bring specialist knowledge and experience and will help deliver some of the most dramatic buildings the Capital has seen, as well as bolstering supply.
The continued release of public sector land could have a marked impact in London. The future landscape is likely to be an increasing ambition to identify and develop new emerging markets with the inevitable strong competition for the best opportunities.
A notable trend during the first half of 2014 has been a shift in activity away from Core markets and into Outer Core areas.
The planning pipeline is also now looking fuller with the number of units applied for and granted permission during H1 2014 increasing significantly. 12,000 units were submitted for planning application, while 15,500 units were granted planning permission during the first half of this year. These were 28% and 57% higher, respectively, than H2 2013 numbers.
The total Central London planning pipeline now stands at 119,200 units, its highest level for three years.
Our local experience spans various land sites through UK.
Contact us today for details.