Increases in residential land values in central London have outpaced underlying property prices so far in 2011, new research from Savills has revealed. The firm noted that the same pattern holds true in the hotel and office markets as well. According to its figures, residential land values have risen by 17 per cent in the last 12 months, while growth in house prices has reached just two per cent in the same period. Meanwhile, head of residential research at the company Yolande Barnes suggested that further hikes are to come, as "values remain ten per cent below peak".
"Finite land supply, particularly in prime, central locations, coupled with continued demand for high-end product for overseas buyers, has buoyed values," she stated. Ms Barnes argued that the strong performance of land for use as housing enhances the case for converting sites set aside for offices and hotels into space for dwellings. And there is evidence of investor appetite for residential real estate in the capital.
Last month, WA Ellis reported a surge in demand from foreign investors keen to purchase a property in London. Greek, Russian, Indian and Chinese buyers were among the most prolific groups hoping to take advantage of the city's status as a safe haven in times of economic turmoil, the firm noted.
- Friday 14 October 2011