The number of residential housebuilding projects planned for London continues to rise. This is according to research by EC Harris Built Asset Consultancy, which found there has been a 70 per cent increase in the quantity of schemes in the pipeline from 2011, with 125 initiatives currently at different stages of planning and construction in the capital.
EC Harris's annual London Prime Residential Development Pipeline report also revealed there are currently plans for 15,000 units to be developed over the next ten years, which amounts to more than GBP 38 million. Development projects are strongest in Chelsea & Fulham, which is home to 25 per cent of these units. The South Bank, City and Kensington are among other popular areas of London for development.
Mark Farmer, head of residential at EC Harris, said the increase in housebuilding projects scheduled for the future is partly the result of the London Olympics. "London prime residential continues to act as a magnet for global investment and offers clear opportunities for properly organised and funded developers and investors to generate healthy returns," Mr Farmer said.
Many of the property investment projects are scheduled to be completed by 2016, with 3,800 units expected to come on to the market in four years' time. However, Mr Farmer notes that investors should still be cautious about property in the capital, saying there are risks such as "the sustainability of unprecedented levels of international investor and sales demand fuelling the lower end of the prime market, a lack of development funding and a scalability of specialist development skills".
Despite this, Cluttons' latest Residential Property Forecast: Q3 2012 predicted that the capital's real estate market will perform well over the next six months. It anticipated that buyers from overseas will help create a 3.2 per cent increase in property values in London this year, with international investors taking advantage of the weak sterling by putting their money in UK real estate.