Thousands of new homes are being built in the capital at prices well beyond the reach of most Londoners, a report has revealed.
Construction consultants EC Harris found more than 4,600 homes have been built, approved or planned this year at a value of between £1,250 and £1,650 per sq ft — two to three times higher than the current average price of existing houses in the areas where they are being built.
Overall, more than 20,000 prime homes could be delivered in London over the next decade. The combined sale value could exceed £50billion, with the potential peak of development activity predicted to be in 2017.
New hotspots for building include the South Bank, Bayswater and Paddington, away from the traditional “prime” areas of Mayfair, Belgravia, Knightsbridge and Kensington.
In these areas, where prices exceed £1,650 per sq ft, EC Harris noted that activity now appears to be fairly static, reflecting a shortage of sites. Among major high-end developments are the penthouses being built in the second phase of work at the Battersea Power Station site, set to be released for sale in April 2014. These could sell for £25 million to £30million, according to Liew Kee Sin, of the Battersea Project Holding Company.
As the bulk of the high-end market involves foreign buyers and investors, currency movements will be “crucial”, EC Harris said, warning developers risk an increasingly crowded market.
Darren Johnson, Green Party Member of the London Assembly, said: “Building 20,000 luxury homes isn’t supplying the sort of homes Londoners need, it’s a waste of scarce land and is driving up prices elsewhere.
“The Mayor needs to use his planning and housing powers to ensure that homes affordable to ordinary residents are the priority.”
