Despite the increasing demand for new developments across the UK, new analysis has suggested the start of new build crisis in Central London as average property prices reach £914,532 and demand falls.
London Central Portfolio’s (LCP) analysis of the LOREMA and Land Registry data has revealed a 43% decrease in the number of new build sales so far this year compared to the same time in 2015.
The analysis reports 1,491 new units sold compared to 13,194 older properties – a figure that has remained static compared to this time last year when 13,190 were sold.
Pointing to a dip in foreign interest as a potential cause, Naomi Heaton, CEO of LCP, commented: “In light of the plethora of tax hits over the last few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority buyer of new developments, may finally be turning away.
“These properties typically sell at a significant premium, averaging 25%, over older stock and history demonstrates that a saturation of over-priced commodity-style property leads to softening prices, particularly during times of economic uncertainty.”
Contrasting these figures is the number of new developments approved for construction this year, which has seen a 20% increase in the planning pipeline since 2013, representing 106,208 units.
