As Chartered Surveyors in London it has been essential for Davis Brown to keep track of development throughout 2015, in order to monitor the strength of the property market and help predict the level of activity over the upcoming year.
Over the last year London has seen an astonishing level of development with major schemes throughout the capital, whether it be in Earls Court, Battersea, Docklands or core Central London. The larger developments schemes such as Edgware Green or Embassy Gardens in Nine Elms have often triggered major regeneration in the local area with plots of land and vacant derelict buildings being rapidly turned into new development sites as a result. Our professional commercial agents in London are aware that any land with the potential for development is highly sought after, even if on a brown field site and has limited access or lacks planning. One of the major reasons for a large amount of development in recent years is the significant lack of residential accommodation, which fails to satisfy the housing demand and as a result properties are achieving high sales / letting prices. As a result a number of the major development projects have been conversion from commercial to residential such as Centre Point below.
Centre Point, WC1
Despite this there was reportedly a slowdown in units entering planning permission in the second half of 2015. Surveyors in London believe that was largely due to the build up to the election and lack of economic and political certainty; however since then the Government’s changes to stamp duty have seriously impacted on the top end of London’s residential sales market. On top of this, due to the concern over increased mortgage regulation and rising taxes estate agents in Fitzrovia and the rest of Central London are expecting a slightly subdued sales market during 2016.
Battersea Power Station
The potential for a subdued residential market in 2016 could see a slight fall in the number of new residential development projects, but may in return see developers focusing more on commercial space such as the mixed-use development at Rathbone Square, Fitzrovia (see below) including 216,000 sqft of office space and 39,000 sq ft of retail space.
Rathbone Square, W1
Despite these concerns made by some agents in the market, Davis Brown has little change. Recent development sites that have been put on the market, such as Old Ford Row in Bow, have received a huge number of offers which significantly exceeded the original asking price.
Surveyors at Davis Brown and in the rest of London still sense that developers are eager to build, and when development land becomes available in London, high prices can still be achieved, whether planning permission has been granted or not. Commercial agents in London are expecting certain areas to boom with further development, especially in Battersea and Vauxhall, due to the current development at Embassy Gardens and Battersea Power Station that are significantly regenerating the area, and Southbank which has evolved to become a major part of prime central London. As demand for housing within commuting distance of Central London will continue to remain high, any land with development potential is expected to continue to achieve high sales prices, even if there is a slightly reduced sales market in 2016.