Who Is Investing In London's New-Build Hotspots?

A recent Knight Frank report looking at the prospects for a range of districts in London singled out numerous areas that can expect to see property price growth of over 50 per cent by 2016...

A recent Knight Frank report looking at the prospects for a range of districts in London singled out numerous areas that can expect to see property price growth of over 50 per cent by 2016. Among the regions of the city highlighted in the report were Hammersmith, Earl's Court, White City, Marylebone and Fitzrovia - with a 78 per cent increase in real estate values predicted in Hammersmith alone.

These districts in the west of London clearly offer much potential for capital growth, if investors are to believe the Knight Frank assessment of the city's future performance. Editor of Property Investment News Richard Bowser explained that London has always been appealing to investors looking for long-term returns. "Many international investors are continuing to be attracted to London residential property because it is viewed as a solid, long-term safe haven," he stated.

According to Knight Frank, Marylebone and Fitzrovia are already drawing interest from wealthy buyers, due to their proximity to Mayfair. Meanwhile, the organisation revealed that Earl's Court may become classed as a prime central London location following the flurry of new developments in the district, which may therefore attract investors seeking this asset class. Mr Bowser pointed out that it is not only those from overseas who are tapping into the capital's real estate market.

He commented: "Many cash-rich UK investors are also buying as returns from bank deposits are so poor." Mr Bowser added that the anticipated improvement in values, coupled with annual returns of five to six per cent at present, make the prospect of purchasing real estate assets in the city "compelling".

Meanwhile, the Residential Property Focus report released by Savills this month noted that equity purchasers have had a significant impact on the prime London market, with an estimated GBP 6 billion coming from international sources in the 18 months to June 2011. A lack of supply of prime assets and rising prices may encourage those with money to spend to look to some of the city's up-and-coming districts, like those named in the Knight Frank report. Savills pointed out that the influx of capital from overseas equity buyers helped push London property prices in the most desirable areas higher by 12.7 per cent during the first three quarters of this year.
 

- Thursday 17 November 2011

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