Housing shortfall remains in London
The construction of residential property in London remains a key issue for developers, as the pace of building works remains behind the level of demand for properties in the capital, it has been revealed.
Lucian Cook, head of residential research at Savills, said acute shortages in the private rented sector continue to be seen, while general housing provision across Greater London is well below the amount required to satisfy buyer demand.
As a result, prices for development and buying in the capital remain that much higher than the rest of the UK, especially given the city's status as an international hub.
He commented: "I think it is partly the ability to buy into London, so there is to some degree a safe haven. London is clearly seen as a world city, which they find attractive.
"There is also fairly significant wealth generation over those markets which means that a number of schemes have been marketed effectively to where the available investment fund exists."
Mr Cook added that the average deposit for a first-time buyer in the capital currently stands at £60,000 and therefore more people are being forced into rented accommodation.
As a result, developers are now focusing on this area more closely, with increasing activity being registered for privately rented properties, although the level of construction still remains somewhat behind the actual amount required to meet demand.
Earlier this month, commercial research director for Savills Mat Oakley noted the commercial property sector in the capital remains unbowed, with investors continuing to fund developments.
A total of between £12-13 billion has been invested in London market over the last year, with tower blocks proving to be increasingly attractive to investors.
Many overseas buyers are being drawn to this form of property, as they offer excellent medium-term fund security.
--- Ends ---