50% of London flats snapped up unbuilt, as prices hit record highs

Demand for new developments has reached record levels, with 48% of new flats being bought off plan in 2012, according to new research.

High-value properties, worth more than £1,000 per square foot have seen sales rocket by 240% in comparison to 2011, new figures from the UK’s leading commercial property and real estate services adviser CBRE have shown.  

The boost has been attributed to buoyant foreign demand, especially from Southeast Asia buyers who prefer modern properties.

“These schemes are all substantial in size, each with more than 100 units for sale,” said Mark Collins, CBRE’s head of residential.  

“With a substantial volume of units to sell over a long period of time, it is important to establish confidence in a scheme from the beginning. This trend is encouraging given the number of large sites coming forward.

“Half of the schemes are by the Thames or a canal, showing the powerful appetite for riverside living, he added.

The strong performance for off plan sales comes on the back of overall positive results for London’s real estate market, also published today.

In a separate study by estate agents Knight Frank, prime central property prices were found to be up 53% since March 2009 when the market hit its post-recession lows. It is still up 16.5% from previous 2008 highs of 2008, Knight Frank said.

The main international buyers in London in the last three years were from Russia, India, the U.S., Italy and France.

“London’s relatively healthy rate of price growth compares with a somewhat anaemic -1.4% for New York, -4% for Paris and -6% for Geneva,” said Liam Bailey Knight Frank’s head of residential research. “Over the last two years the proportion of £1m-plus sales in London to non-UK buyers was 51%, rising to 60% for properties priced above £5m.”

The strong performance has yet again been attributed to foreign buyers, with Russian, Indian, the American, Italian and French nationals heading the list of buyers.