Humberts has today released figures focusing on London’s new build residential and development market, with the statistics highlighting the area opportunities for new build schemes whilst taking into consideration housing targets and prices per sq ft.
Development activity reached a record high in 2016/17 with 20,600 new homes completed in London (not including conversions and changes of use), but still fell short of the Mayor’s current annual target of 42,000 homes and a long way from the ambitious 64,935 set out in the Draft New London Plan.
The figures show that the top three areas with the highest 10 year housing target and price per sq ft ratio are;
Our Head of Land and New Homes, Adam Phelps, says; “Where targets are high, local authorities will be keen to bring forward sites for development and will almost certainly be open to higher densities. The prospects for end sale price will dictate what a developer can pay for land. The higher the sale price and the higher the density, the more viable the development opportunity. Our figures suggest that Tower Hamlets, Southwark and Wandsworth are likely to be the leaders of the pack with regards to new build residential development over the next 10 years – savvy developers looking to maximise their returns would do well to scour these postcodes.”
To support the statistics, Tower Hamlets is the borough which has the largest number of developments planned, however Wandsworth and Southwark lag behind with their planning permission and application pipelines.
Ian Westerling, Managing Director of Humberts, says; “There are certainly more development opportunities in Tower Hamlets than Wandsworth and Southwark due to the current housing stock and land assembly deals. However, as well as large scale development a real difference can be made through the release of the smaller sites in all of the boroughs – the Mayor’s new ‘small sites’ initiative to encourage SME developers to build on public land is a step in the right direction. We urge the councils and TFL to release public land in order to help reinvigorate London’s housing supply.”
When taking a deep dive into the data surprisingly current price per sq ft values in Inner London have on average performed better than Outer London: up 2.5% when compared with 1.2%. The overall performance at borough level ranges from -7.8% in Hounslow to +6.3% in Hillingdon.
Adam Phelps continues; “Hillingdon is the second largest borough with a thriving business centre, a large population of young people and vast swathes of green space. Hillingdon provides really good opportunities as it still remains one of the cheapest boroughs in London, making it a great choice for young professionals or families. The impending arrival of Crossrail in areas such as West Drayton will lead to increasing regeneration and could make ideal investment opportunities. Density is a huge theme in the latest housing target plan – the GLA is proposing to remove the density matrix which will encourage higher buildings in outer London than we are used to – developers will also be encouraged to build on gardens and open spaces. The aspiration is to greatly increased density, especially around transport nodes.”
If you would like to see the full report then please get in touch with our Land and New Homes team by email: firstname.lastname@example.org or by phone: 0207 594 4749.