The property market in London

The capital is a powerhouse driving the UK’s economic performance.

8 April 2014, Words by Lucy Greenwood

 

London is riding high and is at the heart of the UK’s economic recovery. Its residential markets have recorded double-digit annual price growth (12% in the SEU) for the first time since the market downturn. Some sub-markets have performed particularly strongly. Fulham, the first stop for buyers moving out of prime central London, and Marylebone, which attracts domestic and international buyers thanks to its urban village lifestyle, both saw above-average growth in 2013.

In common with London’s residential markets, its domestic buyers are much more active in the office investment sector and are now the dominant buying group in certain London locations – for the first time since 2007.

To date, risk-averse international investors have tended to focus on prime, low-yielding stock, but we anticipate there will be more 
interest in secondary, high-yielding assets in fringe locations as the economic recovery becomes even more ingrained.

In London’s office markets, take-up is being driven by the growth in the Technology, Media and Telecoms (TMT) sector, which accounts for the largest share of take-up in the West End and is now a staple source of demand in the City – Canary Wharf, for example, is actively re-profiling its future building offer to suit TMT companies.

London is anticipated to be among the best performers in the coming years across a number of real estate asset classes in the world cities we monitor.

 
 

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