Over 50,000 apartments in London’s most exclusive areas are planned. But who will buy them?
London is crying out for homes that the wider population can afford. But instead of family homes, developers have built a glut of swanky apartments in central London’s most expensive areas.
According to data company Lonres, over 54,000 properties are now planned or underway in London’s priciest areas.
But as the supply of extravagant apartments soars, demand for luxury properties in London is waning, property developers have warned.
In 2014, a particularly strong year for property, just 3,900 homes worth over £1m were sold in these areas.
US property group JLL has warned that London’s new builds will see a fall in prices of 3% over 2016, and say they do not expect to see price rises in the sector until 2018, the FT reports.
In addition, developers are already seeing the effects of the market imbalance.
Shares in London based property development company Capco dropped 8% last week after it revealed it is struggling to sell apartments in its Lillie Square development, which each sell for between £600,000 and £6m.
Shares have also fallen in St Modwen, a development company which owns 57 acres of development space in Battersea.
Foreign demand for luxury properties has also slowed down over the last two years. Speaking to the FT, Knight Frank’s Hong Kong office said interest in London property has fallen by around 50% since 2013/14.