Why London’s real estate is on track for a record-busting year
International buyers buying up investment property in London are pushing the city’s commercial real estate sector to new heights.
Property experts Savills predicts that the volume of commercial real estate transactions in central London this year will amount to more than £20 billion - and could even beat the 2014’s record level of £21.6bn.
Buyers coming from more than 27 countries invested £14.2bn in central London commercial property during the first three quarters of the year this year, which means 2017 is definitely on track to make a new record, Savills experts say.
Square Mile’s starring role
Investors are concentrating on property investment in the City of London - or the Square Mile. The first three quarters of 2017 saw investment in this small but lucrative part of London beat the 2014 record of £12.6bn
As well as traditional investment destinations like Canary Wharf, regeneration in and around the Square Mile will see further interest in new real estate developments poised to take advantage of proximity to London’s centre for finance.
Residential prices rise
Figures released last week show residential property prices are also on the move once more. After a short period of decline, mainstream residential property prices are up 5.6 percent since this time last year.
As well as mainstream price growth, prime Central London property is also on the move, rising by seven percent over the last year, just 3.3 percent under 2014’s record highs. This follows a steep decline in the second quarter of 2016 when the government introduced extra taxes on the country’s most expensive homes.
Property UK’s Mert Altinisik says prime London real estate has always appealed to overseas investors, and contrary to what experts predicted, this doesn’t seem to have slowed following last year’s Brexit vote.
“UK commercial and residential real estate continues to appeal to a very diverse range of investors from all over the world, and we’re seeing a new wave of interest as more and more London regeneration property is developed. These new properties in developing parts of London appeal to a wider range of investors than ever before.”