A PICK UP in activity in last year’s central London development market has driven sales and construction to post-crisis peaks, with a further strong performance expected this year, Jones Lang LaSalle (JLL) said.
Research released yesterday by the property specialist showed over 7,300 new homes changed hands in central London last year, up 50 per cent year-on-year and the highest number recorded since the financial crisis.
Launches of new homes also jumped 6,800 in 2012, up from 5,600 in 2011 with core locations enjoying even higher levels of growth.
Peter Murray, lead residential director at JLL said overseas buyers from Asia-Pacific, the Middle East and Turkey were the driving force behind demand but added that UK investors were also leading the way.
But despite the rise in demand, Murray warned of a continuing divide between “core areas” such as the West End and central west London and the outer core areas such as the south east and north London.
Battersea Power Station and Exemplar’s Fitzroy Place are both schemes that have sold rapidly.
“Demand for schemes in core locations with good transport links and proximity to central London continue to do well,” Murray said.
JLL said the number of units under construction has also moved “to a cyclical high”, with 14,250 homes now under construction across the whole of central London, boosted by a surge in new starts in 2012.
The property firm said developer sentiment remains positive with the majority feeling enthusiastic about progressing development.
However Neil Chegwidden, residential research director warned that development activity will not grow enough to meet the demands of London’s expanding population.
“As demand grows and supply shortages are exacerbated we believe price growth will be pushed towards eight per cent per annum by 2017,” he said.