BUILDING (UP) THROUGH BREXIT
The property markets favourite word: BREXIT!
Armageddon, End of the world, Apocalypse, Black hole – is this the reality?
The consensus seems to be that the gloom is exaggerated and hyped. Most of those IN the market still feel that prime property still holds good value – even with the redefined boundaries of what could be considered prime and not.
PCL is no longer an exclusive acronym for the boroughs of RBKC, Mayfair, Belgravia, Knightsbridge. We now have some outer prime areas in South West London, City and even in East London. Not to mention the riverside markets and the boom around Battersea.
Video Credit: Evening Standard - Homes & Property
The bigger question is about how the government will meet those elusive housing targets.
As it stands around only one-third of the 66,000 that are needed are built each year. Although, population growth and a supply issue help retain value in bricks and mortar for investors!
PrimeResi recently published a very informative and interesting article about the “Towers of London”. This demonstrated how over 500 towers are now in the pipeline. (510 new, with 115 currently under construction). An increase on 2016, which had a pipeline of 455 with 91 under construction.
Could this be the route to the top (or route to help contribute to solving the housing crisis)?
The article from PrimeResi points out that a lot of these are residential and overall have the potential to deliver 106,000 new homes by 2030. That’s equivalent to 1.5 years of housing supply according to the new London Plan housing targets of 66,000 new homes a year.
Going with the theme of re-defining PRIME, almost a third of the entire pipeline is in Zones 3, 4 and 5. Half of the tall buildings pipeline is in East London sub-region, with 252 tall buildings, followed by Central London with 99.
Price growth in regeneration areas is further evidence of a shift in prime. JLL recently released research into London’s biggest regeneration areas, demonstrating that regen areas outperform the London average by 40% over five years.
The dampening of the sales market across the board has given further impetus to a prime and super-prime rental market whilst buyers sit tight. JLL also expect rents to rise steadily by around 2.5% P/A from 2020-22.
JLL amongst many others also feel that retaining a strong economy, especially post-Brexit, will keep driving housing demand whilst continuing to push up prices. They believe that demand from overseas will not flag as investors are unlikely to shy away from London purely because of Brexit.