Financial Times: A £38bn development boom in London’s most expensive neighbourhoods has been spurred by rampant demand from European and Asian buyers seeking safe investments away from turbulent Eurozone economies.
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The pipeline of upmarket housing projects in planning or already under construction in the UK capital has increased more than two-thirds during the past year, with 15,500 units slated for delivery by 2021, even as building work in other parts of the country remains stagnant. If completed, London homes in development would cover a surface area equivalent to the 2.5 sq km Olympic Park in Stratford, according to EC Harris, the building consultancy, and would have a market value of £38bn. The huge number of developments being planned reflects the strong demand for expensive homes in London, with prices still surging as investors from overseas have flocked to the capital in to find stable investments away from the turmoil in the financial markets. London’s prime property market — the top 5 per cent of housing by value — continues to outperform those of rival locations in New York, Paris and Hong Kong. Prices in the top slice of the London market have risen 49 per cent since March 2009, according to estate agents Knight Frank, driven almost entirely by foreign buyers. This rapid value growth has lured developers, private equity companies and wealthy individuals to pour billions into building luxury housing schemes. In the past year, a rash of large-scale housing projects have got under way, including the multimillion-pound redevelopment of Hyde Park Barracks. It is in the smaller end of the market, however, where investors are converting commercial property into luxury apartment blocks, that has been most active. For example, John Caudwell, the entrepreneur and founder of Phones 4u, last year paid £150m for a multi-storey car park in Mayfair, planning to convert the site into a 24-unit housing development. This includes a 19,000 sq ft penthouse that is hoped to capture some of the international demand. Read the full article written for the Financial Times by Ed Hammond, Property Correspondent here
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