London demand to outstrip supply

Jun 13, 2013

 

By Andrew Batt:

Supply of new housing in Central London will fall as much as 40 percent short of demand over the course of the next ten years, according to a new research report.

Analysis by Knight Frank published in its London Calling report this week predicts that if the annual uplift in households continues on the same trajectory as the previous decade, then there is an indicated undersupply in housing of more than 40 percent across the capital between now and 2023.

The report focuses on Central London and includes the four boroughs of Kensington & Chelsea, Camden, City of London and Westminster. Knight Frank says an extra 41,860 households are expected to be created between 2011 and 2021, giving an annual average uplift of 4,186. It estimates that demand for private sector homes will be around 3,218 a year.

The reports says: “The strength of prices and sales for prime and super-prime London property since 2009 has led to increasing numbers of developers targeting this portion of the market. While our data indicates that supply will fail to keep up with demand this does not mean that there is unlimited capacity for delivery at every price point.

“The sheer weight of interest by developers at the top end of the market means those active in this sector will have to keep a very close eye on their pricing, especially for schemes moving away from the traditional core central prime areas.”

Source: http://my.knightfrank.com/research-reports/london-development-report.aspx

Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email [e-mail]