More new homes in London now underway

Date:

Friday 8th July 2011

With growing signs that the recent property price boom in Central London will ripple out to other parts of the capital, fuelled partly by a shortage of new build homes, London-based housebuilders have increased the number of housing starts in outer London boroughs, in anticipation of greater capital growth.

New research from CB Richard Ellis (CBRE) shows that housing starts almost tripled over the last quarter in outer London boroughs, as demand for new homes in London continues to grow.

The surge in overseas nationals buying property in Central London is spreading out to other parts of the city. Weston Homes, named Housebuilder of the Year at last year's What House? Awards, recently sold over 30 new homes at its King's Island development in Uxbridge to a group of Asian investors.

A rise in foreign buyers taking advantage of a weak Sterling has helped to push property prices in central London up by 8.3% year-on-year, according to Knight Frank.

CBRE says that across London, the number of proposed residential property developments with planning consent increased by 36% in prime central London and by a staggering 125% in its surrounding boroughs.

The number of stalled sites has reduced by a third and nine schemes that were on hold at CBRE's last assessment have begun construction.

The largest national developers have driven the upswing with the top 10 national housebuilders increasing their share of starts in the capital from 15% in Q4 2008 to 60% in Q1 2011.

Jennet Siebrits, head of residential research, CB Richard Ellis, said: "Big developers are better able to react to improving market conditions, than the smaller players. At a time when debt finance is scarce for residential development, national housebuilders can fund schemes through balance sheets and can advance projects on their books that already have full planning permission.

"Larger sites are not only easier to come by in outer London boroughs, but are also likely to be hardest hit by the Community Infrastructure Levy payments which could encourage developers to start on site now. Developers are expecting the price rises in central London to ripple outwards into the surrounding boroughs, as buyers look for more affordable property further afield."