You’d be surprised where £1,000 only buys a square foot in London
The areas of London where a new-build home costs a minimum of £1,000 a square foot have spread dramatically over the past decade, according to new research out today.
In 2005 only the “big three” addresses — Knightsbridge, Mayfair and Belgravia — could command the square foot premium, now new homes in Liverpool Street, Primrose Hill, Holland Park and Pimlico have joined the premier zone.
And the spread continues. Over the next 12 months property consultant CBRE, which has mapped what it describes as the “£1,000 wave”, believes the £1,000 a square foot minimum price will extend to new areas, including Wapping and Nine Elms near Vauxhall, south of the river.
In west London the wave is creeping towards Brook Green, say the researchers, while the whole of the South Bank area is also being swallowed up.
Mark Collins, head of residential at CBRE. “Starting at the traditional hub around Hyde Park high values have rippled out like a wave over time, swelling at a rate of 1km every eight years.” A value of £1,000 per square ft means a typical two-bedroom flat in these areas will now cost around £750,000.
And as the £1,000 per square foot ripple effect has steadily expanded, reaching Holland Park in 2005 and South Bank in 2008, homes at the original hub can now cost up to £6,000 per square ft.
“The “wave” is not travelling in a uniform pattern,” said Collins. “In the future we expect to see the same irregular pattern, with some more desirable areas leap frogging other locations. For example, while Whitechapel to the east might be closer to the edge of the current boundary, Wapping with its superior infrastructure, stock and reputation is likely to break the £1,000 barrier first. We expect the forthcoming wholesale redevelopment of the Vauxhall, Nine Elms, Battersea area will be captured in the £1,000 per square foot price point in 2012.”
The wave also has implications for the market in “second hand” homes. While CBRE points out that new build tends to be of higher quality, the company sees the second hand market catching up.