Buying demand for new-build flats in London drops by almost half

In echoes of the last recession, demand has plunged for new-build apartments in London as thousands more new homes are set to be built.

Sales of new apartments in inner London are down 43% on last year.

In contrast, the planning pipeline is up 20% compared with 2013, with 106,208 new units already approved.

A further 17,494 planning applications have been submitted, including 111 for high rise towers. Altogether, new applications are up 27% on three years ago.

New schemes which have already been approved continue to be centred around Tower Hamlets and Nine Elms, with 33,239 and 18,655 new units respectively.

Average prices of new units are now £914,532, but values are falling – down 8% from their high in 2014.

According to the Land Registry, only 1,491 new units in inner London have sold so far this year – a 43% decrease compared with this time a year ago.

This compares with older properties in inner London, where there have been 13,194 transactions so far this year, compared with 13,190 at the same stage last year.

Many new properties have been sold off-plan to wealthy foreign buyers, but Naomi Heaton, CEO of investment firm London Central Portfolio, said: “In the light of the plethora of tax hits over the last few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority buyer of new developments, may finally be turning away.

“These properties typically sell at a significant premium, averaging 25%, over older stock.

“History demonstrates that a saturation of over-priced commodity-style housing leads to softening prices, particularly during times of economic uncertainty.”

More top news stories

Ex-professional footballer scores own goal as landlord of unlicensed properties

Continue Reading ...

UK virtual tours firm clinches global deal with fast-growing US estate agency firm

Continue Reading ...

Hybrid agents can take up to 30% market share in next five years, Purplebricks boss declares

Continue Reading ...
x

Email the story to a friend

3 Comments

  1. JMK

    “Many new properties have been sold off-plan to wealthy foreign buyers, but Naomi Heaton, CEO of investment firm London Central Portfolio, said: “In the light of the plethora of tax hits over the last few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority buyer of new developments, may finally be turning away.”

    Not according to some sources.  It is said that the Chinese are queuing up to buy because the extra taxes are heavily outweighed by the 10% gain through the exchange rate.  If the Chinese are taking that view then surely other nationalities will be too.

    Report
  2. Mark Connelly

    JMK I can’t buy into the anecdotal evidence that the Chinese are all over the London market. Certain agents wish they were but I am not seeing that.

    On the contrary a very large number of buyers bought to flip. Yep still a strategy can you believe?  These guys will take a bath as there is no one to now flip to. A lot of these guys bought with no intention of completing.

    I think that developers will have a pretty tough time ahead getting paid what they have already exchanged on. Battersea and Nine Elms being a great example.

     

    Report
    1. Property Paddy

      Dear Mr Connelly

      So the London market is doing what ?

      Steady as she goes?

      Dropping like a dead donkey?

      On the up and away.

      Phones are ringing off the hook or are you checking BT haven’t cut you off cos the phones haven’t rung all day?

      Good to get market conditions from the horses mouth.

      Cheers

       

      PP

      Report
X

You must be logged in to report this comment!

Leave a reply

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.