Sunday, May 23, 2010

London Apartment Sales Soar

London Apartment Sales Soar


The number of apartments for sale in London is falling way short of existing investor demand, placing added pressure on apartment prices in the Capital.

The opportunity to buy apartments at or near the bottom of the property market is an investors dream, and as a consequence, property investors are snapping up apartments across London, before prices potentially appreciate further.

But the supply of new build apartments in London - typically more common than houses due to the shortage of available land in the city - has fallen in light of the recent economic turmoil, and as result, fewer homes are now available for sale.

Around two-thirds of all new build apartments put up for sale in London last year were purchased by buy-to-let property investors, buoyed by improved rental yields, according to property research group Molior London, who conduct extensive market research of London's 33 boroughs.

Speaking at a seminar addressing investors late last year Tim Craine of Molior London reflected on the enormous impact that overseas investors have also had in the property market recovery, with a number of apartments having been sold to overseas nationals.

Ever-growing property investor demand could lead to strong property price growth over the next few years.

Savills project that average property values in the UK could surge by as much as 27% by 2015, with the greatest gains – 35% - in London, mainly due to a shortage of new apartments and houses coming up for sale on the market. If accurate, this would represent an almost 8% increase on peak market prices in late 2007.

In fact, with residential demand on the up, there is evidence to suggest that some London apartments currently for sale are already receiving offers in excess of what they would have achieved at the peak of the market in 2007.

Peter Rollings, the managing director of Marsh and Parsons, said: "We have many examples of properties that have sold and are continuing to sell for more than they did in 2007."

He added: [Property prices] in London in my view ended the year [2009] with prices having risen 10% to 12% from their lows, with much larger gains for some of the 'A1' properties – apartments and houses in excellent locations which satisfy all the necessary criteria."

While the prospect of rapid growth in London property prices may encourage more existing homeowners to put their apartments up for sale, it will come as an added concern to first-time buyers already unable to afford that crucial first step onto the housing ladder.

Thankfully a growing number of apartment sale London are being made available via various affordable housing schemes, which is proving a big hit with first-time buyers.

The Homes and Communities Agency recently confirmed financial support that will unlock over 10,000 new houses and apartments through various affordable housing initiatives, which offers homes for sale on an equity purchase basis.

The construction of more apartments in London will also help to reduce waiting lists for housing, which in many London boroughs is currently at an all time high.

By enabling house builders to build more houses and apartments, including affordable units, the councils hope that it can dramatically reduce those waiting for permanent accommodation.

Handing greater decision-making powers to local authorities, in relation to the construction of new build homes, is a key Conservative Party policy which crucially could increase the volume of apartments available for sale in London.

If the Tories are elected into government at the general election this year, they claim that their 'local' initiative would improve the planning system by encouraging house builders to construct more new build apartments in London, along with other parts of the country.

The proposal has been welcomed by a number of property firms, such as British Land.

Chris Grigg, chief executive, of British Land, said: "Removing burdens to development and growth has to be near the top of the agenda whoever wins the next election.

"Low interest rates and a cheap pound make the UK a great [property] investment proposal and it is vital that we do not let outdated planning laws hinder recovery."
(ArticlesBase SC #1960149)
Marc Da-Silva - About the Author:
Marc Da-silva deals with recent topic on London Apartment for sale. He shows how London property rents are in context with the common market rent. As London Estate Agents we help you search for properties conducting property surveys.
Source:  http://www.articlesbase.com/real-estate-articles/london-apartment-sales-soar-1960149.html