London’s luxury housing market is set to go into overdrive over the next four years, with 3,800 super-homes - equalling the size of the Olympic Park - likely to be built in 2016 alone.
Emboldened by the success of One Hyde Park — the Knightsbridge development which has achieved record-breaking prices, including the sale of a penthouse to Ukrainian billionaire Rinak Akhmetov for £136 million - builders are targeting wealthy foreign buyers, who bought one in three prime London homes last year, helping push prices up by 29 per cent since 2009, according to estate agents Knight Frank.
Now a report by international property consultants EC Harris predicts high-end developers will complete more than 15,000 new homes over the next decade, with a collective value of £38 billion - more than four times the £9 billion cost of hosting the London Olympic Games.
That compares with just 500 homes completed this year with an average value of more than £1,100sq ft.
The most popular areas for the new homes are set to include Chelsea, Fulham, the South Bank and the City.
Recent additions to the luxury market include Grosvenor Crescent, a boutique development of 15 lateral apartments within a Grade II* listed Regency terrace in Belgravia. Properties for sale include a 4,567 sq ft apartment with three double bedrooms and a private courtyard which is on the market for £19m.
Alternatively the Walpole Mayfair is a conversion of two 18th century houses into five apartments conveniently close to the Ritz Hotel in St James’s. A three-bedroom flat is available for £11.5m. And next year buyers will be able to move into The Atrium, Regent’s Park, yet another boutique development – and one which will benefit from a 24-hour concierge service run by Harrods Estates. A penthouse flat is on the market for £7.9m.
However critics point out that the high end boom will do nothing to help ordinary buyers in the capital where it is calculated that an extra 37,000 new homes must be built each year to satisfy demand. And a separate report by Knight Frank suggests developers might be overly optimistic about the appetite of the international jet set for London homes – particularly if they build them outside traditional prime areas.
Liam Bailey, head of residential research at Knight Frank, said: “The strength of sales over the past few years has made developers concentrate on the prime and super-prime segments of the market… But with values surging across the capital, it has been tempting for developers to also put up prices for unsuitable property in less attractive areas. This leads to unrealistic pricing… Developers should temper their expectations according to the nature and location of each site.”