The leading UK market analysts expect the cost of housing in London will increase by more than 20% by 2020. The latest data of the Land Registry shows that the constantly increasing average cost of housing in London has crossed the threshold of half a million pounds, and currently stands at £514,097. The rise in prices in the city is estimated at the level of 12.4% compared to the previous year, which is significantly higher than the level of price increases in most other regions of the country; importantly, the price for the services of conveyancing solicitors has increased quite similarly – roughly by 10%.
The most expensive areas, of course, remain to be prestigious and well-known of Kensington, Chelsea and Westminster. However, the rise in prices in Kensington and Chelsea, according to recent data was estimated at just 3.6%, while prices in Westminster has increased by only 6.1% compared to last year – a positive, but a slight increase in comparison with other areas of London. The greatest increase in property value over the last year noted in the areas of Barking and Dagenham (15.3%), Hillington (15.2%) and Enfield (13.4%).
Thus, considering the prospect of buying real estate in London for the purpose of investment, prospective buyers should explore developing areas, which can often have a greater potential than the well-known districts of the capital. It is worth paying attention to the regeneration zone areas – Nine Elms, White City, King’s Cross, and many other places, where the value of property has not yet reached its maximum price. Ambitious projects to revive and transform these areas significantly raise the cost of housing in them, and makes them more attractive to buyers, and the presence of two stations will benefit suburbs Ealing and Acton.
The steady increase in property values can be associated with a number of different factors. Availability of mortgage lending continues to attract more and more new customers. Another fact that instils confidence when buying new homes is the parliamentary elections that took place in mid 2015, by the results of which it became clear that an addition to mansion tax on expensive real estate is not going to be imposed.
Growth in the future will also largely depend on the number of proposals of new homes on the market. In recent years, the rate of construction of new facilities significantly lagged behind the required amount of property, which the city must ensure the ever-increasing population. Territorial capital opportunities for the construction of new facilities are limited – in London simply do not have enough space for the rapid construction of new facilities in accordance with the growing demand, and a permit for the construction of new homes can take years, so significant changes in this area are not expected.
One of the most significant factors contributing to the increase in prices, as is the fact that the inhabitants of the so-called ‘family’ areas such as Clapham and Fulham, are less and less willing to move to other counties of England. A dynamically developing London’s economy, increasing the cost of the daily commute from the suburbs to and from work, and as a result, significantly increases desire to stay in London, leads to the fact that families with young children no longer want to move to the suburbs, as it was earlier.