House prices under threat in Tower Hamlets due to ballooning development and Brexit

Helen Cahill
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Construction Of Canary Wharf's Crossrail Station
Tower Hamlets is becoming a popular destination for bankers due to its proximity to Canary Wharf (Source: Getty)

House prices could be set to fall in Tower Hamlets due to the rapid development of the borough, according to new research.

Data collected by property consultancy Propcision shows Tower Hamlets makes a decision on more planning applications than any other London borough, and approves far more developments than other boroughs, which could lead to a downwards pressure on prices.

In addition, if the financial industry is hurt by Brexit, this "could have an immediate effect on housing prices" in the area, according to Michelle Ricci, co-founder of Propcision.

On average, London boroughs have made a decision on nine residential planning applications per year since 2009. But Tower Hamlets has been deciding on an average 35 developments per year during that period, and it approves 91 per cent of those applications.

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Between 2010 and 2016, Tower Hamlets has started construction on 8,060 new homes, exceeding all other London boroughs. In Southwark, the borough with the second largest number of homes under construction, this number falls to 6,140.

Tower Hamlets is soon to become London's densest borough as a result of its construction boom.

In 2015, Tower Hamlets was the second densest borough, with 14,514 people per square kilometre. Islington was the densest borough, with 15,118 people per square kilometre.

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But the Greater London Authority has forecast that Tower Hamlets will overtake Islington by 2018.

Between 2001 and 2015, its housing density has increased by nearly 40 per cent, almost double the density increase seen in Islington.

Ricci said: "If house prices continue to weaken across London, data does suggest that Tower Hamlets is positioned to be amongst the more vulnerable areas as residential dwellings have increased dramatically in the area within a short period of time.

"Furthermore, given the correlation between new build developments and the financial industry in Canary Wharf, if the financial industry is impacted by Brexit, then it could have an immediate effect on housing prices and rental yields in new-build developments within Tower Hamlets."

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