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Almost a third of all new homes planned for London over the next five years will be concentrated east of the city’s financial district, a new analysis shows. A total of over 55,000 homes will be built in just four boroughs, according to the report from international property adviser, Savills, which identifies a shift in the capital’s centre of gravity towards the east. It says that the boroughs of Newham, Tower Hamlets, Greenwich and Barking and Dagenham will account for 29% of all new homes planned for London in the five years to the end of 2018. ‘The Olympics played a hugely important role in opening up the area to investment and transport improvements are now driving occupier, investor and developer demand in previously overlooked east London postcodes,’ said Susan Emmett, Savills residential research director. ‘This is changing the shape of London and its property market, with a discernible pattern of emerging development hugging the East London Line portion of the new London Overground. The network extension to Barking Riverside and the completion of Crossrail with give a further boost,’ she added. The analysis report points out that lower average capital values in the east of London have provided developers with the opportunity to build much needed homes that are affordable for those living and working in London. However, while central boroughs such as Westminster and Kensington and Chelsea remain the most expensive, the biggest increases in value have been seen away from London’s core over the past year, particularly in cheaper locations to the east. But, not only have prices increased ahead of the Greater London average, transaction volumes have also received a dramatic boost. In Tower Hamlets, the number of homes changing hands is now double the pre-peak norm, while deals in Newham are up almost 50% year on year. Key emerging residential areas include Stratford with 6,500 new homes, including 2,800 in East Village, Canning Town and Royal Docks with 8,000 homes, Canary Wharf with 4,500 homes at Wood Wharf and 850 at Asda Crossharbour and Greenwich Peninsula with 10,000 new homes. Average prices currently range from £500 to £700 per square foot in Canning Town and Royal Docks and £550 to £750 in Stratford, accessible to households with an average income of over £70,000. In Canary Wharf, popular with financial sector employees both as owners and tenants, values range from £700 to £1,200 per square foot. Greenwich Peninsula is expected to achieve values in the £550 to £850 range. ‘It is this dynamic of rapidly rising prices, albeit from a low base, and the strength of demand that will present developers with their biggest challenge. Market strength has pushed the value of new build in Canary Wharf, the most established East of City location, to £700 to £1,200 per square foot, out of the reach of the… Continue reading →
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